Party City Holdco (PRTY), mcap=$153m, price $1.4 vs $3.65

Pitch: Category leading retailer of party goods at a very cheap valuation but with high leverage. The key bullish argument rests on PRTY business being resistant to online competition because its low-price products and helium balloons make it “un-Amazonable”. The company’s turnaround has been slowed by Covid but is expected to bear fruits shortly. Recent sales weakness caused by temp factors that should be ending or reverting.

Valuation: PRTY trades at roughly 4X ’22 year EPS and just above 2x 2023 earnings power of roughly $1.50 per share.

Exp. gain: 700% to $30/share in 5 years.

Full PRTY write-up (free guest account required):

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