The Container Store (NYSE:TCS) is one of the latest companies to go public that has a well-known commitment to conscious capitalism. In fact, during the company's first conference call, CEO Kip Tindell was practically tripping over himself to explain the tenets of the movement and lavished praise upon his employees.

While the company certainly has a feel-good quality to it, not everyone is convinced that it is worthy of their hard-earned dollars. In fact, since topping out at the beginning of the year, shares of The Container Store are down 27%.

This raises the question: Is The Container Store really a good investment?

Screen Shot

Source: The Container Store. 

 Every year around the beginning of spring, I review all of my family's stock holdings. Because I'm loath to sell any of our shares, I like to explore the bear thesis and see how it makes me feel. So today, I'm investigating what bears have to say about The Container Store.

What follows are the two most commonly voiced bearish opinions, and my thoughts on them:

These guys will get crushed by e-commerce giants
It's no secret that brick-and-mortar retailers are facing tough times. As more and more shoppers migrate to the Internet, any company that doesn't have a solid e-commerce presence is simply inviting bankruptcy filings.

Furthermore, (NASDAQ:AMZN) captures an incredible amount of e-commerce traffic, and it has organizational products available on its site that directly compete with The Container Store. In the past, going head-to-head with Amazon had surely been a losing battle, and shareholders of The Container Store should be appropriately careful about this threat.

My take: Amazon's awesome, but it can't replicate The Container Store experience.

I'm not going to say anything bad about Amazon here. I love the company. I think everyone should own shares. Currently, Amazon accounts for 11% of all my retirement holdings. But The Container Store has one thing that Amazon simply can't offer: an in-store shopping experience that customers simply can't stop raving about.

Full disclosure: I don't have a Container Store location near where I live, so I haven't gotten to experience this firsthand yet. But to a fault, people who have been to the store can't hide their obvious satisfaction with the overall experience.

The customer service experience is something that, sadly, many brick-and-mortar retailers have failed to address. But with The Container Store's employees-first approach, a culture has taken hold that breeds positivity.

That, plus the fact that the company's e-commerce segment has increased sales at a brisk pace -- 17.5% during the first half of 2013 -- leads me to believe that The Container Store is uniquely situated to withstand pressure from Amazon.

The stock is simply too expensive
As things stand now, The Container Store is operating at a loss. The company hasn't turned a profit, though it expects to next year. That said, even if it meets earnings expectations for 2014, it is currently valued at 55 times those earnings.

Though in 2011 the company generated a healthy $30 million in cash flows, that number has now gone negative as well, largely due to capital expenditures focused on building out The Container Store's presence in new markets.

My take: This is a fair concern, but there are more ways to measure the possible value of a company.

I won't deny that The Container Store has a comparatively expensive stock. That's why it currently accounts for 1% of my overall holdings.

But there are several ways to gauge the company's value that make it look more enticing. For instance, at the end of last quarter, there were only 63 stores in 22 states and the District of Columbia. The company thinks that, eventually, there's a potential for more than 300 stores.

That means that there's a potential for almost five times more stores. Once those stores are built out, the capital expenditures will surely subside, and because the company is able to retain its highly qualified employees and cut down on these associated costs, it will be able to churn out much more cash.

The Container Store is valued at $1.6 billion. Though it's tough to find a direct competitor, a store like Bed Bath & Beyond is worth about $14 billion today. That's about nine times the valuation.

I'm not saying this is a perfect comparison, but it gives you an idea of how small the company is now. With The Container Store just getting started in its growth story, and a shopping experience that has won over some raving fans, I'll be just fine holding my shares well into the future.

An enormous bet on an employee-first culture
Our chief technology officer is going to do something crazy: invest more than $100,000 of his own money into one stock.  Like The Container Store, this company sits at the top of the mountain when it comes to treating employees well.  In fact, I agree with him, as I own this stock as well.

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Brian Stoffel owns shares of and The Container Store Group. The Motley Fool recommends Bed Bath & Beyond and The Container Store Group. It recommends and owns shares of Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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