Cintas Corp (CTAS)

They're merging with UniFirst and the US antitrust is allowing it. CTAS is paying a lot, half cash and half stock. The stock portion is sending shares down. This makes it a buying opportunity as the deal closes.

Cintas, #1 in uniforms, wants to buy #3, Unifirst. Cintras just raised its offer, including a $350 million break fee if Washington doesn't approve the deal. That's how confident Cintas is. UNF shares soared 16% today.

They report Wednesday. Likes it at current levels and he expects an upside surprise.

 A great, long-term hold. Shares are down on fears that hiring is slowing down, which would effect CTAS' uniforms business. Buy some now, then wait for the next quarter; buy more on a disappointing quarter.

It reports Wednesday. The market didn't like their last report and shares got hammered. He's worried about small business, and Cintas sells uniforms to small business.

Cintas is launching a hostile takeover of Unifirst. Though the applauds M&A, this deal may need federal anti-trust scrutiny, because of this small market (work uniform rentals), though Cintas insists there is competition from Amazon and Costco.

A great stock. They have a huge pastiche of customers, including Mosaic.

Strong organic growth and operating margins, and exceeded high expectations. They did a 4-for-1 split a few weeks ago that will attract new investors.

They announced a 4-for-1 stock split early this month. They reported a strong quarter last March, but got a tough downgrade last week that he disagreed with. The sell-off that followed is a blip and shares will recover.

They report Thursday. They've seen no slowdown in business and he expects that to continue. Buy on any pullback.

CTAS operates as a corporate uniform service provider, and is now trading at 35x times' Forward P/E. In the last five years, sales grew around 6% on average. The balance sheet is strong, with net debt of $2.5B. Net debt/EBITDA is currently at 1.1x. Based on consensus estimates, sales are expected to grow by 6%-8% on average over the next few years. The company has been consistently raising dividends and repurchasing shares over the last few years, which we like. Overall, a solid company with the recurring business model and shareholder-friendly policies, however, trading at 35x Forward P/E while growth is only around 7% does not seem to us as a screaming buy, but we would be comfortable averaging into the position over time, being more aggressive if valuation dips.
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They just reported a massive beat and shares jumped 5%. The short-sellers bet wrong.