MoneyGram International
MoneyGram is the result of a reverse spinoff. This wasn't in Joel Greenblatt's book, You Can Be a Stock Market Genius -- the fuel of my investing fire as of late, as some readers may recall -- but I think I survived the mental exercise of thinking through what a reverse spinoff is. Viad
This seems to be another one of those situations Greenblatt considers ripe for being incorrectly valued. Viad is in the convention and travel services business. That's certainly out of my circle of competence. But Viad had these money transfer businesses that didn't really fit into the mix. Et voila, MoneyGram is on its own to compete against the likes of First Data's
MoneyGram has a cool business model that one might call a "double dipper." First, it charges customers a fee to use its distribution network. Then, customers provide the money to be transferred, which goes into a holding account. The second dip comes from the short-term interest MoneyGram makes on the float before completing the transaction. This is exactly what American Express
The other great thing about businesses like these is that once the distribution network is in place, it is scalable. Transactions can be increased at each node or by adding nodes. Renewing the company's Wal-Mart
The stock has retreated from a high near $23 to its $18.78 current price. I think MoneyGram deserves a harder look. Where to start? Greenblatt says to focus on management incentives: You can do just that via the Form 10. Have fun!
Fool contributor David Meier does not own shares in any of the companies mentioned. The Motley Fool has a disclosure policy.