Brian Stoffel's avatar
$65.4m follower assets
Our Next Stock Purchase: A Small-Cap Stock
We're rounding the corner to home in building out our model portfolio on CommonStock. Many of you have noted that we haven't bought all the companies we've talked about. That's purely because we have to wait for permission to buy them because of our work with The Motley Fool.

As for our next stock, it is Clear Secure $YOU Here's everything you need to know.

And be sure to leave a comment letting us know what you think for a chance to win $ 100

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Most people know Clear b/c it helps you skip the ID line at the airport, but it has more uses

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And the number of people signing up to use the service has been growing
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While retention number are admittedly not stellar, we love the fact that Clear spends next-to-nothing on selling, as it has government-protected real estate inside airports (more on that in the moat section , too)
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The moat is straightforward.

Network effect: more users, more incentive for airports, bars, stadiums to use, etc.
Switching: There's no real alternative
Intangible: that government-protected real estate
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What's more, the company has some pretty solid financials, especially with cash flows. (stock based comp is the drag on net income)
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One more thing on the horizon: an agreement to sell TSA Pre-Check and Clear as a bundle. This is in the test-phase, but could be a HUGE boon moving forward.

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Here's what we would watch moving forward

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But what do you think? This is a stock that's not on many people's radar...
Beaver Capital's avatar
Very cool! I did not know they were publicly traded. I have seen them in the airports a few months back and noticed that they all had employees helping people use them and get through the lineups easily - looked like a good product/tech.

I am very curious about how they would combat fraud against age verification? I could see restaurants being a massive market for them with queuing.

I will have to dig further into the fundamentals, so thank you for bringing awareness of $YOU
Conor Mac's avatar
Interesting, not heard of this one before!
I only signed up for clear because my travel credit card paid for it. I wonder what percentage is due to AMEX/travel card reimbursements, and how many people will actually pay $189 annually if the travel reimbursements end. TSA precheck is a one-time fee, so would be non-recurring after enrollment.
Joshua Simka's avatar
@westeban This. And those cards are always changing up the card benefits. Definitely something for the risk section. But I love the FCF and gross margins.
marco formica's avatar
Thank you, interesting!

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