High conviction shorts offering 30%+ downside
Choice Hotels (CHH) - Brand commoditisation + long-term supply overhang = broken unit growth story. Once the 2021 pent-up leisure boom passes, CHH’s multiple will contract to reflect its reduced long-term growth prospects. TP $69.
Focus Financial (FOCS) - Roll-up strategy is destroying value; questionable accounting. Cash ROIC continues to look very poor. TP $25.
Louisiana-Pacific (LPX) - OSB supply response will happen much faster than bulls expect. Accelerating capex / capacity expansion near cyclical peak is a mistake. TP $30.
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- 29 April, 2022