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- Napkin Reports #1
Hello. This email marks the official start of the 2025 treasure hunt. Over the year, you can expect 27 more "napkin reports," each reviewing 2-3 stocks that make it through the initial screening process. Behind these selections are countless others filtered out earlier in the idea generation stage.
The goal is simple: to turn over as many rocks as possible and close 2025 with a refined watchlist and several four-page investment write-ups on high-potential compounders, turnarounds, or other opportunistic ideas that emerge along the way.
Thanks for reading, and I hope you find this valuable.
REPORT #1
JACK IN THE BOX INC. | NasdaqGS:JACK
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MONITOR. JACK operates and franchises its namesake brand alongside the newly acquired Del Taco, both QSR chains, and is nearing completion of a multi-year, asset-light transformation through a refranchising strategy. After years of subpar performance, the appointment of a new CEO in early 2020 turned things around, with the company expanding into new markets for the first time in over a decade, achieving positive NUG after more than five years, and reaccelerating SSS through growing digital sales and other initiatives. However, JACK's heavy West Coast footprint makes it particularly vulnerable to California's newly enacted minimum wage increases. While the restaurant industry broadly faces similar headwinds, JACK has been disproportionately punished by Mr. Market despite its heavily franchised QSR model being superior to company-owned fast casual and casual dining concepts. Still, the success of the Del Taco integration remains uncertain, given JACK's prior failure with the now-divested Qdoba, and the recently initiated dividend complicates its debt situation. Until there is greater clarity, the company warrants close monitoring, but no more.
REPORT #2
ZEDGE, INC. | NYSEAM:ZDGE
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If you have any questions or feedback, don't hesitate to reach out via email at [email protected].
Until next time,
The Tiger’s Prey
ABOUT
NAPKIN REPORTS
Published on Thursdays, except the first two of each month, BMO.
"I've felt that before people buy a stock, they should take a piece of paper and simply write […] out what their reasoning is, and they should be able to get it all on one side of one piece of paper. In fact, they should be able to get it into a paragraph."
A good investment thesis should be concise enough to fit on the back of a napkin. Napkin Reports aim to filter ideas for further research through brief, surface-level reviews. Once an idea with a rough hypothesis is identified, the next step is to assess the researchability of the situation, the inherent attractiveness of the idea, and whether additional time should be spent on it. Napkin Reports apply this process systematically, passing 2-3 stocks per issue through a front-end screening mechanism to allocate time and capital to the best risk-adjusted ideas. Each filtering process is summarized into a single paragraph with one of four outputs: (1) highest priority, (2) proceed, (3) monitor, or (4) pass.