Helen of Troy (HELE) short, mcap=$2370m

HELE short pitch:
– Levered roll-up of undifferentiated brands.
– The roll-up story is now unwinding.
– Collapsing/declining revenues are seen across all of the business segments.
– Accelerating organic revenue declines (-20% last quarter) and higher cost of capital leave no capacity to continue the roll-up story.
– There is no platform value – acquisitions are used to plug holes in ex-growth businesses and have no synergies.

HELE valuation:

– Trades at 10x adjusted fake EBITDA and 15x real EBITDA.
– Valuation makes zero sense.
– Downside is $50 or lower.

Exp. gain: 50% to $50/share.

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