I am surprise Warren Buffet has not been buying this company hand over fist it seems like the perfect company for him to own in part or in full. This company is one of the most capital efficient businesses you will ever discover.

Good businesses bought at a fair price often turn into wonderful stock market compounding machines over the long term.

This great business is Stamps.com (STMP). It helps individuals and businesses avoided the dreaded hassle of going to the post office by allowing you to purchase and print postage from your home or office computer.

Stamps.com customers can send mail through USPS by First Class, Priority Mail, Parcel Select and Media Mail. You receive a small digital scale to weigh packages and create labels from your Stamps.com account.

A sign of a great business is one that generates a lot of free cash flow which they can then use to reward shareholders through dividends and stock buybacks.

Stamps.com has grown very consistently year after year.

Since 2000 sales have compounded more than 20% per year. And they earn $0.34 of every dollar of sale as free cash flow. Most companies are luck to have a 10% free cash flow margin. Stamps.com is in very limited company at over 30% free cash flow margins.

The share price has fallen back towards strong support of $180 due to e-commerce uncertainty as the economy begins to open up from the pandemic. The company still reported great earnings up 95% verse 4th Quarter 2019. With the great results, the ability to generate tons of cash in goods times and bad and a focus on rewarding shareholders, I rate this company a buy. If you can buy for any price under $260 you are purchasing a great company at a fair valuation.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. The information provided should NOT be considered advice. The topics discussed are risky and have the potential to lose a substantial amount. I am not an investment professional and therefore do not offer individual financial advice. Please do your own research before investing.

Posted Using LeoFinance ^Beta