European & US short ideas
Since Vision pitched their short thesis on Vidrala, Verallia and O-I Glass at our Equity Shorting Conference in mid-Mar the stocks have underperformed the Stoxx600 by ~8%. In the last couple of months they have also initiated 3 new European shorts, 3 new US shorts, and has readied a new $7bn+ European short (trades ~$20m/day and has short interest of <1%) for initiation next week. Please join Vision for a meeting while members of their team are in Paris (Jun 5th-6th), Zurich (Jun 7th) and London (Jun 8th-12th).
In the last 24 months, Vision has closed several shorts including: Allegro, AutoStore, Boohoo, Burlington, Colruyt, De'Longhi, Electrolux, Gerresheimer, H&M, Hargreaves Lansdown, Inditex, New Relic, Nokian Tyres, Peloton, Similarweb, Thule, Trex, TSMC, UiPath and Whirlpool.
Edition: 161
- 26 May, 2023
A new $3bn+ M/Cap European industrial short
Industrials
Trades >$10m/day and has <1% short interest - will be lapping price increases at a time when volumes have turned negative and there are substitution threats and declining per capita usage of products at some of its largest customers. It trades >10x EV/EBITDA on 2023 estimates that call for 40% growth in EBITDA.
In the last 24 months, Vision has closed several shorts including: Allegro, Boohoo, Colruyt, H&M, Inditex, New Relic, Nokian Tyres, Peloton, Similarweb, Thule, Trex, TSMC and UiPath.
Edition: 154
- 17 February, 2023
Consumer Discretionary
A crying shame of managers' greed leaves zero equity value - the 2022 annual report again underlines that BOO is managed for the wealth creation of its founders and executives. Accounting is a mess, lacks disclosure and increasingly adjusted to support management remuneration targets. During fiscal 2022, growth slowed down significantly, real profitability crashed and cash evaporated. Even if capex normalises, Teun Teeuwisse does not see how the online fashion retailer can sustainably generate cash. Without cash generation and with debt rapidly mounting BOO shares are worthless paper.
Edition: 137
- 10 June, 2022
Exciting new $5bn+ Industrial Short
Industrials
Trades more than $30m/day and has short interest below 5% - over-earned in 2021, faces increasing competition and bullish estimates, and its inventory accounting method may have unsustainably boosted margins.
Vision Research aims to find liquid, non-consensus, fundamental US & European shorts, generating ~25 new ideas p.a. The shorts initiated by Vision during 2021 have fallen an average of 9%, with average alpha of 16%. Stocks that fell more than 25% included Peloton, UiPath, Allegro, Boohoo, Traeger, Children’s Place, SimilarWeb and Vital Farms.
Edition: 128
- 04 February, 2022
Consumer Discretionary
Another timely short from Robert Prather - dismal earnings has seen $10bn+ wiped from PTON's market cap. Having initiated coverage mid Sep’21 at $112 (58-page report available on request), the shares are now languishing just above $50. PTON is the latest in several successful short calls from Vision Research. In fact, of the 23 ideas they have initiated on in the past 12 months, 20 have generated positive alpha (in a rising market), including UiPath, Vital Farms, Boohoo and Allegro (share price has fallen 40%+ from recent highs).
Edition: 123
- 12 November, 2021
Consumer Discretionary
H1 results disappointed the market (down 15% on the day & 30% in the last two weeks) and Forensic Alpha's machine intelligence system, Dragonfly, has identified an additional risk on the balance sheet: a sharp rise in DSI, from 83 to 105 days - more than 3 months of inventory now on the books. Inventories have gone from £168m in August 2020 to £255m in August 2021, representing ~150% of FY21 adjusted EBITDA. Any write-offs or write-downs of inventory could be substantial.
Edition: 121
- 15 October, 2021
Boohoo (BOO LN) UK
Consumer Discretionary
Same share price as last year, but now offers an even better risk:reward - BOO has gone from having just four brands to thirteen, has trebled in size, wields enormous social media influence and pivoted its product offering on a sixpence during Covid. It not only has the platform, but also the desire, hunger and ability to buy failing brands and consolidate them all online. The fact that Next and ASOS have recently started to pivot in this direction is notable - are they threatened by the opportunity BOO has created for itself…?
Edition: 112
- 11 June, 2021