Some US stocks of Interest

 SUMMARY OF VIEWS ON SOME STOCKS

Note that IT or AI-related stocks are trading near ATH, while CD and some others are left behind. The softness in the US consumer is evident causing fears of a spending recession in the US. That is partly reflected in CD stocks. Are there any gems being thrown out with the bathwater?

NKE--$73

Lots of stock-specific issues here. Management at least sounds much more humble than they did a couple of years ago. Not too sure if the DTC strategy has panned out as expected, with channel realignment now being engineered. Some older brands are de-emphasised and more investment in innovation is required. New products are coming and maybe it is just a lull. The trouble with downplaying the wholesale channel looks to be coming home to roost while the competition especially in China appears tougher.

LULU--$290

The Athleisure leader had good results and the numbers look attractive. Competition and maturity of the NA base is the issue. NA looks to be slowing, with the relevant questions being have we reached a level of saturation that leads to lower growth? At the same time, competitors like Alo Yoga and Vuori are mentioned the most. Do they take incremental sales?

International expansion is possible, the market outside NA is quite open but will the brand resonate as well overseas as in NA? China again is competitive, but LULU needs traction in this market.

May need the men's segment to grow to achieve growth targets. The growth targets are reasonably aggressive. Not too sure how this will go.

I do like the integrated business model that LULU successfully run, which gives greater control. Premium products with outstanding customer service are the good points.

SBUX--$76

Operational issues abound here, appears that getting served in NA is an issue, prices may be too high, convenience is falling and low-cost competition in China increasing. That’s a lot. SBUX is a strong brand and resonates, especially in NA. New CEO as well. QSR is hard and depends on management being on the ball and lots of moving parts to put the experience together for customers.

FND--$95

A very fast decline in LFL sales. Flooring tied to housing and consumer surplus so both hit. Do not see structural issues may be the best to look at through results. Less hairs. Of course, the stock had a big bounce when Munger said it possibly was the next COST.

below are US existing house sales. note the collapse to multi-year lows. FND biz is tied to this which suggests the weakness is warranted. the ongoing issue is that many mortgage holders have locked in low rates and to buy/sell a home means a new mortgage at rates well above what they currently hold. that phenomenon probably stalls transactions, it will pass but when? five-year chart followed by 10-year chart.





PAYC--$161

Something different, a former high flyer HR management software company. Transitioning the main product into a better value product to continue growing. The growth rate has markedly peeled off in the last year. HR software is an incredibly competitive space. Transitioning is risky.  Competitors are ADP, Workday, PCTY plus many others. CF is low due to capitalised sales commissions. There was also a YT recording, bizarre with the CEO saying we need to do better. At best a small position due to the competitive field, although there will likely be many winners they will all keep each other honest.

Main focus FND LULU in results imo—consumer could be a bit weak.

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