6/10/24 - $aso - dip buy only in the low 40s on EPS- greedy only6/10/24 - vrockstar - NASDAQ:ASO - generally think we should find a spot to buy this but probably won't be necking out in this tape where everything's on edge and i don't believe the mkt has really digested the job's report (which is fake - but for another day friends- i digress).
if you look at this name vs. it's mega peer NYSE:DKS - it's defn been a bleeder ( NYSE:DKS is much better own - and probably remains the case). but they tend to match each other fairly well. and when you look at the google trends this is also the case - but it's not some massively widening divergence.
trends.google.com
so even tho the market tends to not like valuing '25 if '24 will be trough and we're (in the case of consumer) still entering a wtf scenario is < $7 (this year) the right staring # or $7.5 (which is '25)? if it's $7.5 - we need to be conservative w/ the multiple by a large margin. some of these retailers r going for mid single digits and without debt in the capital stack. this one is 25% debt. so maybe 5x is too cheap, 6-7x good value. if 5x puts us at $35 on the EPS this year - that's obviously a buy. it also suggests we'd probably be at 7% fcf yield (we're at a little over 5% today - that's fine - but not great given the trough picture of biz ops). at 7x on $7 - you're at $49, a hair below where we're at today about 10%. it's not an obvious buy there, but we're getting a good entry.
this isn't typically a name i'd buy and want to hold so i'd need still more then $49. i also don't think they'll necessarily miss, but don't want to buy it to then double down and get married to trading the position to get back to a gain or take the L and move on.
conclusion - we keep this on watch. anything low 40s we dip buy and assess. i'll follow up on this post. if it beat - we let it go. don't need to swing at every pitch.
V