Consumer Discretionary
SLGN has been added to Gradient’s Greatest Concerns List due to a variety of fundamental and earnings quality issues including: 1) A myriad of top-line headwinds that may pressure sales in 2H23. 2) A relative spike in accounts receivable (surge in 2Q23 represents a marked departure from seasonal norms). 3) Inventory levels have diverged from near-term demand estimates (and appears to be aging unfavourably). 4) Unusual surge in prepaid expenses may represent another margin headwind. 5) SLGN trades at a premium to peers across a wide array of both trailing and forward-looking valuation metrics.
Edition: 171
- 13 October, 2023