Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/chewy-inc" target="_blank" data-smartkarma-citation="entities:28110:1" rel="noopener">Chewy Inc (CHWY US)</a> , one of the largest pure-play pet e-commerce companies that benefited from COVID-19 pandemic, reported 13% y/y revenue growth in 2QFY22, down from 47% in 2QFY20.</li>
<li>The company’s management, including CEO and Director Mr. Singh, sold ~$25M worth of Chewy shares this year, and BC Partners dumped 6.1M shares at $82.50 each in 2021. </li>
<li>Our bear case scenario suggests further room for downside on post-pandemic slowdown, rising costs, intense competition in the pet space, and weak consumer spending.</li>
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Chewy Inc (CHWY US) , one of the largest pure-play pet e-commerce companies that benefited from COVID-19 pandemic, reported 13% y/y revenue growth in 2QFY22, down from 47% in 2QFY20.
The company’s management, including CEO and Director Mr. Singh, sold ~$25M worth of Chewy shares this year, and BC Partners dumped 6.1M shares at $82.50 each in 2021. 
Our bear case scenario suggests further room for downside on post-pandemic slowdown, rising costs, intense competition in the pet space, and weak consumer spending.


Chewy: Post-Pandemic Slowdown Is Here To Stay While Insiders Are Cashing Out

Writing about High Quality Companies, Enlightened Capital

Enlightened Capital

Writing about High Quality Companies

I have more than 8 years of investing experience across Equities and Fixed Income (Investment Grade/High Yield). I have largely focused on Financials, Energy, and Utilities professionally, but I am interested in exploring new sectors to find attractive opportunities. Right now, the Payments sector is occupying much of my time.

<ul><li>Summary: Resilience and Growth Through Turmoil, Asymmetric Opportunity Today</li><li>Target TGT 4.54%↑ has been a highly controversial retailer for years.</li><li>Recall that in 2007, Bill Ackman’s Pershing Square invested in the business, ultimately building a 10% stake and launching an activist campaign to get on the board and force a sale-leaseback of Target’s extraordinarily valuable real estate.</li></ul>

Summary: Resilience and Growth Through Turmoil, Asymmetric Opportunity TodayTarget TGT 4.54%↑ has been a highly controversial retailer for years.Recall that in 2007, Bill Ackman’s Pershing Square invested in the business, ultimately building a 10% stake and launching an activist campaign to get on the board and force a sale-leaseback of Target’s extraordinarily valuable real estate.

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Target saw an improvement in its overall market share across all five of its main merchandising categories and surpassed Wall Street expectations in terms of revenues.</li><li>High single-digit growth was seen in the beauty sector, with Ulta Beauty at Target, skincare, and bath showing particular strength.</li><li>We remain optimistic about their future growth perspective and give a ‘Hold’ rating with a revised target price.</li></ul>

Target saw an improvement in its overall market share across all five of its main merchandising categories and surpassed Wall Street expectations in terms of revenues.High single-digit growth was seen in the beauty sector, with Ulta Beauty at Target, skincare, and bath showing particular strength.We remain optimistic about their future growth perspective and give a ‘Hold’ rating with a revised target price.

Target Corp: New Private Labels & Other Drivers

SPAC Deep Dive, subSPAC

subSPAC

SPAC Deep Dive

Each week we’ll identify and break down for you SPACs that are capturing market share and making an impact.

<ul><li>In an interesting turn of things, a leaked internal memo from Amazon dated back to the mid of 2021 showed that the company could run out of warehouse workers by 2024.</li><li>Amazon, along with Walmart and Target, continues to suffer from high staff turnover across logistics &amp; warehousing (the industry average stands at 49%, but is higher at the big three).</li><li>This has resulted in companies offering incentives, wage increases, and flexible working hours to retain top talent, with margins shrinking as a result.</li></ul>

In an interesting turn of things, a leaked internal memo from Amazon dated back to the mid of 2021 showed that the company could run out of warehouse workers by 2024.Amazon, along with Walmart and Target, continues to suffer from high staff turnover across logistics &amp; warehousing (the industry average stands at 49%, but is higher at the big three).This has resulted in companies offering incentives, wage increases, and flexible working hours to retain top talent, with margins shrinking as a result.

Equity Capital Markets

<ul><li>Target delivered a mixed result to start the new fiscal year with revenues outperforming Wall Street expectations but earnings ending up being significantly below par.</li><li>Inflation has played spoilsport and unusually high costs hampered the company’s growth, resulting in profitability well below what the management expected and where it expects to operate in the future.</li><li>The partnership's results have exceeded the management's expectations, resulting in increased productivity and sales in both the beauty section and adjacent categories in the store where Ulta Beauty has been added.</li></ul>

Target delivered a mixed result to start the new fiscal year with revenues outperforming Wall Street expectations but earnings ending up being significantly below par.Inflation has played spoilsport and unusually high costs hampered the company’s growth, resulting in profitability well below what the management expected and where it expects to operate in the future.The partnership's results have exceeded the management's expectations, resulting in increased productivity and sales in both the beauty section and adjacent categories in the store where Ulta Beauty has been added.

Target Corporation: Expansion of Partnerships & Key Drivers

United States

Dollar General Corporation operates a chain of discount retail stores located primarily in the southern, southwestern, midwestern, and eastern United States. The Company offer a broad selection of merchandise, including consumable products such as food, paper and cleaning products, health, beauty, pet supplies, and non-consumables such as seasonal merchandise.

Dollar Tree, Inc. operates a discount variety store chain in the United States. The Company sells an assortment of everyday general merchandise at the $1.00 price point.

Ollie's Bargain Outlet Holdings, Inc. operates a chain of retail stores that offers brand name products at discounted and closeout prices. The Company provides products, including housewares, food, books and stationery, bed and bath, floor coverings, toys, and hardware.

Ollie'S Bargain Outlet Holdings (OLLI US)

Dillard's, Inc. operates retail department stores located primarily in the southwestern, southeastern, and midwestern United States. The Company offers name-brand and private-label merchandise, including fashion apparel and home furnishings.

Macy's, Inc. operates department stores in the United States.  The Company also operates direct mail catalog and electronic commerce subsidiaries. Macy's retail stores sell a wide range of merchandise, including men's, women's and children's apparel and accessories, cosmetics, home furnishings and other consumer goods.

Kohl's Corporation operates a chain of family-oriented department stores.  The Company's stores feature apparel, footwear and accessories for women, men and children; soft home products such as sheets and pillows; and housewares targeted to middle income customers.  Kohl's also offers online shopping as well as offers store credit cards.

Nordstrom, Inc. is a fashion retailer of apparel, shoes, and accessories for men, women, and children.  The Company operates through multiple retail channels, discount stores, boutiques, catalogs, and on the Internet. Nordstrom, Inc. also offers, through a subsidiary, private label card credit and debit cards.

Groupon, Inc. operates a shopping website that shares information on local goods, services, and cultural events for businesses and consumers worldwide. The Company provides information on activities, travel destinations, consumer products, and live events.

Dick's Sporting Goods, Inc. operates as a sporting goods retailer that manages stores primarily in the eastern and central United States. The Company owns stores that offers a broad selection of brand name sporting goods equipment, apparel, and footwear.

Burlington Stores, Inc. owns and operates clothing retail stores. The Company offers, through its stores and internet sites, men's, women's, and children's apparel. Burlington Holding operates within the United States and Puerto Rico.

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

Trent Limited operates a chain of retail stores that sell fashion apparel, cosmetics, perfumery products and toiletry items. The Company sells apparel for men, women and children. Trent sells its cosmetics products under the "Westside" and "Trent" brand names.

Pan Pacific International Holdings Corporation operates discount stores which sell consumer electronics, daily necessities, groceries, watches, and sporting goods. The Company mostly operates small scale stores based in Tokyo.

Pan Pacific International Holdings (7532 JP)

Naspers Limited operates in the technology industry. The Company invests in global internet companies across the world.

Next Plc conducts retailing, home shopping, and customer services management operations.  The Company's retail stores sell ladies wear, mens wear, childrens wear, and housewares.

Avenue Supermarts Ltd. (ASL) owns and operates hypermarkets and supermarkets. The Company offers products such as garments, footwears, toys and games, bed and bath linen, stationery, grocery, household, and electronic products. ASL operates throughout India.

Dollarama Inc. operates as an online marketplace. The Company offers cleaning, school, office, home, kitchen, food, health, beauty, hardware, electronics, toys, and pets products, as well as provides delivery services. Dollarama serves customers in Canada.

El Puerto de Liverpool SAB de CV owns and operates retail stores and shopping centers located throughout the major cities of Mexico. The Company's stores sell apparel, novelties, and home items. El Puerto de Liverpool also leases retail space in shopping malls in Mexico.

El Puerto de Liverpool SAB de (LIVEPOLC MM)

MercadoLibre, Inc. operates an online trading site for the Latin American markets. The Company's website allows businesses and individuals to list items, conduct sales, and purchases online in either a fixed-price and auction format. MercadoLibre offers classified advertisements for motor vehicles, vessels, aircraft, and real estate, as well as online payment services.

Prosus N.V. provides internet based services. The Company focuses on investments in internet, digital media, e-commerce retailing, and consumer internet companies. Prosus serves customers worldwide.

Target Corporation operates general merchandise discount stores. The Company focuses on merchandising operations which includes general merchandise and food discount stores and a fully integrated online business. Target also offers credit to qualified applicants through its branded proprietary credit cards.

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Target Corp (TGT US)

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Summary: Resilience and Growth Through Turmoil, Asymmetric Opportunity TodayTarget TGT 4.54%↑ has been a highly controversial retailer for years.

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