Hansen Natural – America’s Next Business Model

“In the 1930’s, Hubert Hansen and his three sons began selling fresh, non-pasteurized juices to film studios and retailers in Southern California under the Hansen’s name…”

 

 Although Hansen Natural’s (HANS) product mix has evolved over all these years, and HANS stock hasn’t gotten the red  carpet treatment lately, it’s still in the running towards becoming America’s Next Business Model. Because HANS only develops, markets and sells its beverages, while outsourcing capital intensive operations like production ( e.g. bottling and canning) , its business is really asset light and lean (low on carbs, high on liquidity). This results in great return on equity (45%) and loads of free cash flow.

 

 And though the Wall Street paparazzi have steered their motorcycles to catch  the next nosebleed ramp on the other side of town, HANS still photographs pretty nicely. To illustrate this, check out the table below:

 

 

 

 

Hansen Natural (904 employees of which 448 were employed on a full time basis) ranks at the top – with a wide margin –  when it comes to sales and profits per employee, compared to its peers. This illustrates the strength of its business model, and  the potential for its scalability and operating leverage (low on fixed costs and capital expenditures); and I am not sure that’s widely acknowledged.

 

And for some additional colour I included big cap Google (GOOG) and über big cap  Walmart (WMT). On this metric Hansen Natural ranks pretty much right up there with a company like Google…and that without all the Googleplex-amenities… Still in the running…