Deep Dive: Sleepwell Capital Discusses U-Haul Stock
Updated: Dec 12, 2021
It was great to have Sleepwell Capital back on the show, now a recurring guest, to talk U-Haul stock (the company is actually called Amerco. Ticker is UHAL). We went for almost an hour covering the ins and outs of this long-term compounder. Here are some questions we asked Sleepwell on the show:
What attracted you to studying Uhaul?
Brief history on the company
Can you explain its business model?
What are Amerco’s other business lines? Do you pay any attention to them?
What’s their competitive advantage?
What’s driving the growth in moving equipment rentals right now? Is it sustainable?
Thoughts on management
Uhaul seems to spend most of its operating cash flow on capital expenditures. How do you go about valuing this business right now?
Given that Uhaul has the need to invest so much into capital expenditures, how do you estimate ROIC for the business?
What is the opportunity within the self-storage space? What sort of unit economics does this business have?
We’ve talked about how Uhaul’s physical network effect gives it a competitive advantage. How hard would it be for someone to disrupt Uhaul?
How could an investment in Uhaul go wrong?
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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.