Shorts continue to deliver impressive alpha
Vision has closed 4 short ideas so far in Q4. Wingstop, initiated in 3Q25 on the view that its rich valuation was unsustainable amid intense competition, category saturation and a disappearing customer cohort benefit, delivered 40%+ alpha. Duolingo, also a 3Q25 initiation, faced a massive influx of AI produced competition at lower cost and some slowing in KPIs, generated 30%+ alpha. Kadant, shorted in 2Q24 as a late-cycle capital goods name with deteriorating fundamentals but a “priced-for-perfection” multiple, added 30%+ alpha. Patrick Industries, initiated in 1Q25 given its peak multiple on overly optimistic estimates and exposure to excess inventory, weak demand and tariff/regulatory risks, generated 5%+ alpha. YTD, Vision has launched 13 new US shorts, 7 European shorts and 5 APAC shorts, with 2-3 more initiations expected before year-end.
Edition: 226
- 12 December, 2025
Consumer Discretionary
Gordon Haskett Research Advisors
WING shares took a gut punch, falling over 20%, in response to greater-than-expected Q4 SSS moderation. Jeff Farmer thinks the sell-off is materially overdone, highlighting the restaurant company’s fundamental credentials heading into 2025E including 13%+ system unit growth; +MSD% SSS, almost entirely driven by traffic (following +20% SSS in 2024); ~70% cash-on-cash return; 20% EBITDA growth; and 75% FCF conversion. There is no other consumer discretionary company that can match this. Growth investors who have been wanting to add WING to their portfolios, should do so now. Jeff's TP of $370 equates to 38x his 2026E EBITDA estimate of $302m.
Edition: 198
- 01 November, 2024
Consumer Discretionary
Why is the Company buying back stock at this price? Wingstop announced that its board of directors approved a new share repurchase program with authorization to purchase up to $250M of its outstanding shares of common stock, effective immediately. WING lapped the easiest comp of 2022 at -3.3%. The 10-12% guidance on the same-store sales implies low to mid-single digits SSS for the year's back half.
Edition: 168
- 01 September, 2023