HireQuest: Part 1

New equity research

I must first apologize for the delay in the publication of new research, but I noticed something was wrong that I need to clarify. I’m not sure incentives are well aligned with what respects to equity research publications. Most readers, and investors, may aim for one new piece per month, implying one new idea per month. I find the approach deeply flawed and not in your (nor mine) best interest.

The objective of this newsletter is to become better investors and optimize for long-term portfolio returns. It was unwise from my part to believe I can get a wonderful idea on a monthly basis; not to mention acting accordingly, which underscores a big element of mispricing. I apologize if I hinted such a thing. I was not aware of its incompatibility with the investment philosophy I suspect best fits my personality.

I continuously look for opportunities, but they don’t arise often. Neglecting this fact and still going for dozens of ideas per year seems less profitable than a punch-card approach. Occasionally, I come across an honestly written annual report of a company that I can understand with good economic characteristics.

When I find one, I write deep, hopefully high-quality, research. It is in this methodical line of building a sound framework and portfolio that I seek to attract partners. With the intention of emphasizing this message, I’m offering a 25% discount on the yearly plan.

I’d encourage joining only if you are okay with 2-4 ideas per year. On these, I try to provide you with all of the information I use to estimate the company’s intrinsic value, so that you can judge it yourself. There are no valuations or things alike in this publication.

Additionally, you’ll get earnings reviews on businesses held in the portfolio I manage and quarterly updates. These are meant to help you keep track of relevant events and share ongoing thoughts on portfolio management.

The following button is to redeem the offer, which will expire in 7 days.

If you aren’t sure whether this is for you or not, you can fill in this form and I’ll contact you via email. Link to the Google Forms.

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These 10 pages compose the first of a series of write-ups on HireQuest. The business runs an asset-light model, is founder led, insider ownership exceeds 50%, with some recently buying more, operated at a 40-50% profit margin until 2023 when it declined to 16%, and it frequently engages in M&A, which appears to be done at very attractive terms. Its market cap is below $500M and it operates in a commonly regarded as boring sector.

Table of Contents:

• Brief history

• Overview of the business’ operations

• Characteristics of its franchising model, different from competitors

• How their working capital funding works

• How their workers’ compensation insurance works