Neal Quinn

Don't Panic

Category: MBA

An MBA…It’ll be great!

April 2, 2019 /

The last year and a half has been a blur of activity simultaneously working full time, taking MBA courses at University of Washington Foster business school, and learning how to raise a toddler with my wife. Now that I’m coming to the end of the MBA program with graduation within sight I realized that I now have a headful of knowledge which I only have a vague sense of how it got there.

These markers of that knowledge serve as a reminder of what I’ve learned but more importantly to share what I know with those interested so it might help them in their journey.

Netflix Inc. (NFLX) Valuation

March 16, 2019 /

Near term Optimize, then long term boulders in the stream ahead for Netflix.

Investment Recommendation
Our recommendation is a Sell for NFLX in the near term as it current price for investors to take their earnings now before current headwinds potentially negatively impact the stock price.

The past performance is the company shows good potential for long term stable growth and would watch for buying opportunities if stock moves closer to its value target below.
  • Valuation of business estimated to be $77.9B
  • We believe NFLX currently has more downside risk than upside potential at its current market price and long term outlook.

Current Price: $361.21 / share

Revenue Growth

Operating Margin

Return on Capital

Reinvestment % EBIT(1-t)

Value Target: $124.00 / share

3.0%

14.86%

8.74%

34%

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Starbucks (SBUX) Valuation

March 14, 2019 /

Near term robust market position. Medium term growth but intense local and international competition ahead for Starbucks.

Investment Recommendation
Recommendation is a HOLD for SBUX.

The past performance is the company shows good potential for long term stable growth and would watch for buying opportunities if stock moves below its value target.
  • Valuation of business estimated to be $103.37B
  • SBUX will enjoy excess returns in the near term. but that over the next several years local competitors in the different markets around the world will reduce return on capital.

Current Price: $70.74 / share

Revenue Growth

Operating Margin

Return on Capital

Reinvestment % EBIT(1-t)

Value Target: $65.01 / share

2.61%

16.73%

7.50%

37.18%

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Delta – A Strategic Analysis

January 3, 2018 /

The history, development and growth of the Airline Industry

The airline industry was born with an 18-mile flight in 1914, where passengers paid $5 – or roughly $120 in 2017 dollars – for transport between St. Petersburg and Tampa, FL.[i] The Kelley Act of 1925 gave the biggest boost to the airline industry, which for the first time allowed private aircraft to deliver U.S. mail. Airlines were granted authority on delivery routes based on their bids, and while some passenger services did exist, they were not the key revenue generating activities of the airlines.

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Air Travel Alternatives

November 28, 2017 /

This was a component study exploring the area of substitutes for a later more complete strategy analysis paper of a airline industry company.

Although flying was once a luxury, it has become the go-to means of travel following deregulation in 1978, in particular when it comes to longer distances.  With many airlines offering budget rates, flying can be inexpensive and quick.  However, that’s not always the case and some have looked for alternative means of travel to avoid extended travel time and hidden charges.

A two-hour flight can take double that amount of travel time due to transportation required to get to the airport in outlying areas, long check-in and security lines, transfer times at hubs, waiting for luggage to arrive at the other end, etc.  Many budget airlines have hidden charges such as airport taxes, fuel surcharges, luggage fees, and food and beverages purchased onboard.  Plus, there is gas to get to the airport and parking fees.

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Air Express Delivery Industry

September 20, 2017 /

“to learn strategy a longer lense of time must be used”, at least that’s something my strategy professor would regularly say. It did make quite a bit of sense to think longer term to understand business strategy. Many actions taken by people and businesses are in reaction to previous circumstance and they don’t quite make sense without the historical context. This was a study of the development of a specific industry, air express package delivery, over a 30 year timeline.

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Google in 2015

September 9, 2017 /

This was a strategic study doing a breakdown of some of the key elements of a business and its competitive forces.

  • Why did pay-per-click search grown so rapidly?
    • Rapidly expanding internet going from 130 in 1993 to 600,000 in 1996
    • Initially keywords were only tiny fractional dollars payments per click to websites makes for an initially inexpensive and logical pay as you go type advertising. Owners of websites can easily understand and put value toward with clicks driving traffic directly to their sites.
    • It creates a cause & effect link in ways not possible by traditional marketing & advertising, ex. % of clicks which turn into orders and $, A/B testing, etc. With improved search driving higher quality traffic in the form of people finding the site they were looking for.
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