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.
Full write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/HELEN_OF_TROY_LTD/7029836025