Disclosures

Coinstar, Inc.

I, Eric Wold , certify that this report reflects my personal beliefs about this company and that no portion of my compensation was, is or will be directly or indirectly related to the specific recommendations or views discussed in this report.

Disclosure

  • B. Riley & Co., LLC does and seeks to do business with companies covered in its research reports.
  • A portion of this analyst’s compensation is based on the sales, trading and investment banking activities of B. Riley & Co., LLC.
  • B. Riley & Co., LLC makes a market in the securities of the company covered in this report.
Disclosure Chart

Initiated Coverage on 10/19/2011 with a "Buy" Rating and Price Target of $80.00

Ratings Distribution as of May 17, 2012 % with Investment Banking Relationships
Rating Number of Companies Percent of Total Rating Number of Companies Percent of Total
Buy 112 73.7% Buy 13 100.0%
Neutral 37 24.3% Neutral 0 0.0%
Sell 3 2.0% Sell 0 0.0%
Total 152 100% Total 13 100%

Explanation of B. Riley & Co. LLC's Rating System

  • Buy: We generally expect "Buy" rated stocks to materially outperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly attractive.
  • Neutral: We generally believe "Neutral" rated stocks will perform roughly in line with the S&P 500 and Russell 2000 over the intermediate and long term.
  • Sell: We generally expect "Sell" rated stocks to materially underperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly unattractive.

Risks and Considerations

  • Competition - The industry is highly competitive and many of the Company's competitors have greater resources.
  • Digital Media Downloading - Continued growth in digital downloads could negatively impact the Company's results.
  • Discretionary Spending - The products the Company sells are largely discretionary in nature and any slowdown in consumer spending would have an unfavorable impact on the Company.
  • Economy - Macro-economic issues such as increasing oil and gas prices and a possible drop in consumer spending could have a negative impact on the Company's business.
  • Growth Plan - There are many factors that may impact the company's ability to achieve its stated growth objectives.
  • Industry Change - The industry is subject to rapid technological change.
  • Loss of Key Personnel - In our opinion, the current management team will be instrumental in executing the Company's growth strategy. The resignation of a key member of management would have a negative impact on the Company.
  • Product Concentration - A large percentage of the Company's revenues are from one line of products. Any weakness in those sales would have a significant negative impact on the Company's results.
  • Seasonality - The Company's results are highly seasonal.
  • Weather - The weather can significantly impact the Company's results.
  • General Industry - The Company could miss our estimates and/or their financial guidance.
  • Further Potential Risks - See the Company's SEC filings, particularly its 10-K filing, for a discussion of further potential risks.

Additional Risks and Considerations

    • Consumer – Changes in consumer content delivery preferences, including increased use of personal video recorders, pay-per-view, digital downloads, online streaming, portable devices, and other mediums could materially and adversely affect the company’s operating results and financial condition.
    • DVD Inventory – If the Company does not manage its DVD inventory effectively, its business, financial condition, and results of operations could be adversely impacted.
    • Manufacturers/Suppliers – The Company depends on third-party manufacturers, suppliers and services providers for key components and substantial support for its machines and equipment.
    • Regulation – The Company is subject to substantial federal, state, local and foreign laws and government regulations specific to its business lines, including those relating to coins, access to machines in public places, copyright law, the transfer of money or things of value, currency controls, weights and measures, consumer protection, consumer privacy, data protection and information security.
    • Retailers – The termination, non-renewal or renegotiation on materially adverse terms of CSTR’s contracts with one or more of its significant retailers could seriously harm the Company’s business, financial condition, and results of operations.  Furthermore, the Company may be unable to attract new retailers and penetrate new markets/distribution channels.