Selling Gas Station Chains and Burritos
If you’re looking for a good business to start, make it a gas station; low overheads; constant demand; upsell customers to crisps and sandwiches. It’s a winner!
Marathon Petroleum is looking to sell its chain of 3,900 gas stations, and investors reckon it’ll have no problem finding buyers, even at an asking price of $18 billion. That’s a hefty coronavirus discount, and the market knows full well what it’s really worth.
The impetus to sell comes from corporate raider, Elliot Management. The activist investors are looking to make Marathon a lean machine so that it can focus on its core oil and gas business. This is will save on SG&A costs (paper pushing admin) and give investors a focus!
Chipotle, on the other hand, is selling a record number of burritos online. It sold triple its normal tray as customers were forced to find a way round closed physical outlets, and investors now hope Chipotle can keep up most of this momentum as society reopens.
It was a brutal earnings report released by the company yesterday, an incredible 90% of sales destroyed by restaurant closures, but this was the silver lining. Chipotle has struck deals with Grubhub and UberEats to continue living off e-commerce sales. For how long?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.