**5 HOURS OF RESEARCH** - please read
Hello everyone,
My name is Steve - I am new to InvestorHub as a poster (non-premium member), and I am not much of the message board poster - I am a lurker. I mainly flip stocks a few times, hit it and quit it, and will definitely be doing so with ECFL next few weeks with the expected PRs.
But, every stock I trade, I ask, should I consider investing in this company long-term, even if it is only $1,000-2,000 investment?? 99% of the time with Pinks, OTCBB, my answer is no.
With ECFL, Market 99, I am at a crossroads and have been VERY hesitant to be long-term for several reasons, yet at the same time I've done some DD and I like some of what I see.
DISCLAIMER: I am not currently a shareholder, have no interest at this point, and just wanted to share with you my findings. If anyone has already done this research -- I apologize -- I just started using IHUB 1 week ago. Thought it would be cool to say hello and share my DD.
I've spent over 5 hours on this DD -- and it all rooted from my question -- where the hell is Choctaw, OK, what's it like there, and if I opened a Market 99 there, could it be profitable, and if I lived there, would I want to shop there / have to shop there, etc???
1. Choctaw is a small town 5 miles or so east of Oklahoma City, OK - it is the very eastern edge of OKC's suburban area that prospers from OKC's economic strength. Surrounding it to the north, south, and east are similar towns, though to the east it becomes more rural from my understanding. Choctaw is large geographically, 27.1 square miles with a low population density.
2.
-Choctaw reported a population of 10,803 in 2006 and 9,377 in 2000, total growth of 15.20% during that time period.
-In 2000, there were 3,450 households, 2,808 families, and 3,617 housing units.
-In 2000, of occupied housing units, 86.6% owner-occupied, 13.4% rental. 4.6% Vacant housing units. All #s better than national avg
-In 2000, Median Household income was $49,291, per capita income of $21,041.
-In 2000, Median age - 38 years old, 25.9% under 18, 63.5% between 18 and 65, 10.5% 65 and older. Racially, 88.8% white, 1.6% AFam, 3.7% Native American or Alaska Native, 0.6% Asian, 2.8% Hispanic or Latino, 4.3% mixed race. Preliminary 2006 data shows that 6 year growth of 15.2% had an increase in Native American and Latino populations.
3. Market 99 is located at the Choctaw Plaza @ 14407 Ne 23rd St. NE 23rd St is a major E/W road that goes all the way west into Oklaoma City and into other towns east. It is a major thoroughfare.
4. CHOCTAW PLAZA
- 3 ANCHOR STORES: Williams Food, Chase Bank, and Market 99 - all 20,000sq ft stores
- Many smaller stores including a tanning salon, subway, etc etc typical retail
- The only retail plaza in Choctaw
- 130,000 available square footage, all but 19,200 is currently leased.
- Rental is advertised at $6.95/sqft/yr -- MAX base rental for Market 99 = $139,000 per year or 11,583 per month. Possible discount rate for large anchor store. Possible triple-net lease which could add variable expenses for upgrades / repairs of building
- Williams Food Store and Chase have been listed in local yellow pages for 10 and 9 years respectively at that location. Williams Food Store is classified as having 20-49 employees and 20-50 million in annual sales.
5. LOCAL SHOPPING / SALES
- Within 3 mile radius of MARKET 99 ADDRESS, census reported the following sales volume
General Merchandising Stores - $23 mill
Department Stores - $27 mill
Supermarkets/Other Groceries - $17 mill
Restaurants - $7 mill
Pharmacies / Drug Stores - $9 mill
Convenience/Specialty Food - $1.5 mill
- Within 1 mile, small sales volume
- Within 5 miles, multiply above 3-4x
- Choctaw has 485 businesses in the yellow pages, 29 within .2 miles of MARKET 99, 66 within .5 miles of MARKET 99, and 88 within 1 mile
- MARKET 99 is at the heart of commercial Choctaw
- To go grocery shopping, residents have Williams Food Store as the largest independent grocer in town, several convenience, and a few specialty.
- Nearest MAJOR supermarkets include SAMS, 2 Walmarts, 1 Target Superstore in nearby towns, 6-8 miles from MARKET 99 ADDRESS
6. DIRECT COMPETITION
Dollar General
14433 NE 23rd St, Choctaw, OK (0.03 miles away)
405-390-2808
Family Dollar Store
2426 Hawkins St, Choctaw, OK (0.17 miles away)
405-390-2584
Dollar General
10612 NE 23rd St, Oklahoma City, OK (3.92 miles away)
405-769-7963
Family Dollar Store
9519 NE 10th St, Oklahoma City, OK (4.91 miles away)
405-736-1968
- Within 10 miles, # of discount variety stores increases to 17, 16 of which are Family Dollar and Dollar General, yet this comprises 17 of 27 supermarket/dept stores within 10 miles
- 2 MAJOR NAME DISCOUNT STORES on the same street in Choctaw within sight of MARKET 99
- FAMILY DOLLAR in Choctaw has been in the yellow pages for 6 years, reports < $500k gross annual sales, and has 1-4 employees
- DOLLAR GENERAL in Choctaw has been in the yellow pages for 10 years, reports between 500k and $1 mil annual sales, and has 5-9 employees
7. DIRECT CUSTOMER BASE / DEMOGRAPHIC
I predict that within a 3 mile radius of MARKET 99 dollar store shoppers would consider MARKET 99 a main choice. Within 3 miles of MARKET 99 ADDRESS,
- In 2006, adult population of 7,399, 3798 households.
Only if Market 99 is REALLY special and differentiated could it dip into larger 5 mile radius regularly.
- In 2006, adult pop. of 24,321, 12,394
MY SUMMARY
The company has positioned its store in the major commercial area of a prospering town with money to spend. Demographics and competitive success prove that Discount Variety Stores are successful business model for the area. Market 99 has taken a common marketing approach for public retail, close geographic competition and major traffic roads for highest possible exposure and walk-ins.
Whether or not MARKET 99 has the product differentiation, service, pricing to take business away from competition -- I cannot gather -- but IMHO this alone will determine whether it will be a 3 year failing venture with declining stock pps long term or a 10+ yr success.
From a conservative opinion and based on image alone, they will have a difficult time differentiating enough to dip into 5 mile radius. If price, service, product is good, will have no problem up to 3 mile radius.
I project they will need $400-600 gross revenue to stay afloat per year at this location.
Without financials from company, we will not know.
I am going to also randomly send messages to 250 people residing in Choctaw on MySpace between ages of 18 and 50 and ask them about Market 99. Also emailed the Choctaw chamber of commerce president, of which Jason is a confirmed member.
Thanks, PLEASE RESPOND with your feedback =]
AI
