Steiner Leisure (STNR) Case Study Part 2

This case study is a continuation of the Selling The Seas Case Study Part 1.

In part 1 I told you I was doing this case study to see if I made a mistake when analyzing Steiner Leisure (STNR) back in January of 2014 after seeing the company’s being bought out.

In early 2014 I liked STNR and thought it had some minor competitive advantages.  But found it overvalued so I passed.

The reason I looked at STNR again was because I saw the company was getting bought out by private equity firm Catterton for $834 million.  And at this I wanted to take a second look.

What I found and detail in the 15 minute video below is shocking.

It shows that not only is STNR more overvalued on a relative basis now then it was in early 2014.  But also that its margins have deteriorated a lot.  Even going negative in the TTM period.  And that book value of the shares has halved.

This has all happened in less than two full years.  And we’ll begin to figure out why when looking into the financials in the next part of this case study.

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