Winmark: A Very Stable Business, But A Slightly Overvalued One
Winmark operates as a very capital-light, high-margin franchisor of secondhand stores. The business model is very low-risk. WINA continued to report healthy earnings growth in Q2, driven by higher royalties as the franchise continues to expand slowly. I estimate WINA stock to have -8% downside to $345. The stock is comparable to a slightly overvalued perpetual corporate bond.