Consumer Discretionary
Opportunities such as this do not present themselves very often - the combination of a failed merger and fears around the economy have pushed the equity much lower over the last year (down ~50%) leaving the stock priced at a ridiculously low 7x PE and 3.5x EV/EBITDA for FY22. This is something that might suggest a distressed operator, yet the company has virtually no funded debt. Moreover, there are good prospects for SPWH to grow sales and earnings above what was seen pre-pandemic (Scott Mushkin highlights new store pipeline, improved productivity, increasing omnichannel penetration, growing loyalty program). TP $24 (160% upside).
Edition: 136
- 27 May, 2022