Casey’s General Stores: Fueling Convenience - [Business Breakdowns, EP.125]

Today we are going into the land of convenience stores to break down Casey's General Stores. Casey's currently operates in 16 states in the Midwest and Southern US. As of this recording, they have close to a $10 billion market cap and are the number three player in their market. To break down Casey's, Matt Reustle is joined by Markus Hansen, portfolio manager and senior analyst at Vontobel Asset Management. We cover the industry of convenience stores, including the competition that exists in this market and the unique geographical considerations. We also discuss the financial model, drivers of gasoline performance versus in-store purchases, and margin profiles across the different segments of this business. This is another fascinating story hidden in plain sight. Please enjoy this breakdown of Casey's. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:42) - (First question) - The concept of Casey’s General Stores (00:06:04) - Casey’s competitors and the market share in different regions (00:10:52) - The main differences between Casey’s and a regular gas station (00:14:09) - A brief history on Casey’s beginnings and its founder (00:17:25) - A breakdown of the business’ revenue (00:19:14) - Casey's growth despite the changing environment standards raising operational costs (00:23:52) - The business’ margin profile (00:26:53) - How Casey’s General competes with its peers and fuel pricing (00:29:33) - The focus for Casey’s with regards to expansion opportunities (00:33:06) - The hurdles involved with building new gas stations versus acquiring existing stores (00:35:08) - Casey’s stance on franchising (00:38:02) - The company’s attractiveness to buyers (00:40:52) - Casey’s General’s average stock performance (00:44:26) - Key risks of Casey’s (00:47:30) - The main lessons learned from Casey’s General Stores Important Information: Information provided represents the views of a company of the Vontobel Group (“Vontobel”) and should not be considered investment advice and/or legal, tax, financial or other advice. Further, not a recommendation to purchase, hold or sell any investment and no representation is given that the securities discussed are suitable for any particular investor. Although Vontobel believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this document.