@Fin_Eng_Net
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Too much capital is lost in familiar stocks (nostalgia investing). Free weekly: the value traps. Members: the ignored longs. 🤝
For Stock Picker’s 👉
Joined June 2022
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Too much capital is lost in familiar stocks
(nostalgia investing)
🆓 Free weekly: the value traps.
🤝 Members: the ignored longs + frequent updates as long as I cover them.
No crash letter / fear pitch.
Written opinion. You decide.
Stocks only.
👉 financial-engineering.net
😧
$LULU bad news ain't stopping for Lululemon
Leading securities law firm Bleichmar Fonti & Auld LLP announces an investigation into lululemon athletica inc. (NASDAQ:LULU) for potential securities fraud after significant stock drops.
Lululemon is now facing a securities-fraud investigation from BFA Law over its Sept 3-4 guidance cut (comps -10%, core categories -20%, Q3 EPS guided 60% below estimates)
Can it get any worse? As the stock is close to 10 year lows?
Alan Gałecki – Financial-Engineering.net retweeted
people who only see a "cheap PE ratio" little surprisingly get served a flat beer.
Constellation Brands down 8.5% pre-market after a guidance adjustment to the downside.
$STZ was celebrated because:
- the stock has come down so and so much
- even Buffett and Berkshire bought into it
who cares, if the fundamentals are an empty bottle?
Alan Gałecki – Financial-Engineering.net retweeted
$STZ with another set of weak results due to sluggish demand, promoting a lower FY27 guidance, and a full withdrawal for FY28.
”better than feared” is not really promising, when the business continues to be structurally challenged.
and the stock still expensive — don’t drop debt Of the equation (increased to 10.4B USD).
EV = c. 37B USD
FCF = 1.7B USD
= more than 20x
sure, very attractive valuation …
Alan Gałecki – Financial-Engineering.net retweeted
here's what happens if the crowd buys every dip, bc "Buffett is in" and bc "the stock is so cheap".
let me tell you something.
"cheap" in isolation does not tell you anything.
absolutely nothing.
compared to what you get, $STZ is even still very expensive.
period.
Alan Gałecki – Financial-Engineering.net retweeted
So, when Berkshire buying a stake in Constellation Brands, it was seen as a strong buy.
Now, that Berkshire is out, and $STZ where it traded in 2015 — it clearly is… what please? 🧐
Alan Gałecki – Financial-Engineering.net retweeted
$STZ Constellation Brands remains very expensive.
PE of 11x sounds nice.
but 24B market cap + 10B net debt
= 34B EV
projected FCF just 1.6–1.7B
20x for no growth.
and after the WC when Germans, Scots, and English fans drive home, beer volumes will unlikely hold.
Alan Gałecki – Financial-Engineering.net retweeted
#LVMH $MC people, a new two-year low for your stock.
valuations DO matter in the end.
what was at 30–40x earnings, can't stay there forever when growth fades.
still pretty expensive at expected 25x EV / FCF.
so, don't be surprised if lower "buy-the-dip"-prices occur.
Stagflation fucks most consumer brands and stocks.
Most “strong brands“ aren’t strong enough to pass higher costs to consumers.
$TAP -- Fifth-largest brewery in the world. Brands include Coors Light, Molson Canadian, Carling, Blue Moon, Coors, and Staropramen.
Market cap $6.8 billion. EV $12.9 billion. Cash $2.1 billion. Long-term debt $5.7 billion. No significant debt maturities until 2032. EBIT/interest expense 6.8x. EV/EBIT 7.7x. Dividend yield 5.3%.
Surprise, surprise.
Consumer directionally darling Home Depot $HD gets hammered after lackluster results and guidance.
I continue to preach: be very cautious and selective with consumer stocks, especially discretionary ones.
The more so, if multiples are still high.
Alan Gałecki – Financial-Engineering.net retweeted
Rollins $ROL is amazing because for 10 years it trades 40-50x p/e and you admire it as a great business and then it drops like a stone to 25x and you wonder why would I pay 25x for a pest control business
Alan Gałecki – Financial-Engineering.net retweeted
6/ and finally and likely controversial my take on why I am out of uranium stocks!
financial-engineering.net/wh…
Alan Gałecki – Financial-Engineering.net retweeted
$LULU did definitely better than expected overall
- however, US results are worrisome w/ comp sales –3%
- international still strong w/ +19% & appr. 30% of total sales
nonetheless, at ~20x FCF not worth the downside risk
only because a stock has fallen, doesn't make it cheap!
🤨
BREAKING: Oracle stock, $ORCL, falls -5% after declaring "force majeure" on a massive data center being built in New Mexico.
Oracle has reportedly made the move in order to shield itself from rapidly rising expenses on the project.
$GIS Q1
organic sales flat
Adj. OP −11%
Margins down
Couldn’t pass costs. That’s “brand strength.”
Now they want to “strengthen brands.”
More of the non-working medicine.
Consumers don’t want a shinier logo + less for more.
They want bang for the buck.
Guide still op. earnings strongly down.
Dividend cut next!
The next gold- / silver-mining idea from my member’s area announced a buyout.
Vista Gold $VGZ is the second, after SilverCrest Metals.
In my latest Weekly, I take a brief look at this deal.
👇
financial-engineering.net/vi…
you can download my report about Vista Gold $VGZ that was member-exclusive for free:
financial-engineering.net/mp…
👏 korrekt
