Deep Dive: Luis Sanchez Discusses MoneyGram International
It was awesome to have Luis back on the show (he discussed Avid Technology, Autodesk, and Procore in April) to discuss one of his latest ideas: Moneygram. It is a legacy financial services company with a fast-growing fintech business that he believes is being undervalued right now.
Here are some of the questions we asked on the show:
How you found Moneygram? How long you’ve followed it?
Overview of the business
What was the regulatory settlement about? How will the company benefit from this now being behind them?
What are the barriers to entry in the industry?
The most important product is Moneygram online. Why do you believe it will be successful/grow over the next five years?
What does the valuation look like today? Why could this make a good investment?
The debt and interest expenses will be high in the next few years. How do you think about that in relation to valuing this business?
They just launched the B2B business. Can you explain what that is and whether investors should be paying attention to it?
Would a highly valued fintech like Square or Wise want to acquire Moneygram? Why or why not?
Is Bitcoin or other forms of cryptocurrency a threat to Moneygrams P2P cross border business?
What could go wrong? What’s the biggest risk to the business?
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Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.