Logitech (LOGN SW) Switzerland
Technology
Disconnected from reality - bullish on future demand, the company was comfortable building inventory ahead of sales in 2021, and it was a bet that paid off nicely. However, with the Christmas season over, inventories remain elevated even though growth in 2022 is likely to be far lower. What’s more, disclosure in the 10-Q reveals that management have made large non-cancellable purchase commitments that could lead to inventory rising even more. Shifting tech hardware in a slower demand environment may necessitate promotional activity. Forensic Alpha’s price checks suggest this process may already be under way.
Edition: 128
- 04 February, 2022