Ulta Beauty is a specialist cosmetics retailer that has attracted the eye of Berkshire Hathaway. If the Oracle of Omaha likes it, does that mean that we should as well? It may not be that simple, with a tough competitive environment that is putting Ulta's margins under significant pressure. Does the current valuation reflect that?
Ulta Beauty is a specialist cosmetics retailer that has attracted the eye of Berkshire Hathaway. If the Oracle of Omaha likes it, does that mean that we should as well? It may not be that simple, with a tough competitive environment that is putting Ulta's margins under significant pressure. Does the current valuation reflect that?
Target is the retailer that has been left behind, with Walmart and Costco enjoying a massive uplift in multiples and Target experiencing only modest share price gains that haven’t beaten the index. Part of this is because of a lack of moat and some brand confusion, with Target pushing a value strategy on one hand and yet a more upmarket feel than Walmart on the other. With sales growth having stagnated but earnings on the up, is there an opportunity here for Target as the forgotten retailer?
Airbnb has suffered a significant sell-off in the share price, with the market very worried about growth prospects. This is the danger of a platform company trading at high valuation multiples that assume ongoing levels of growth. If you look deeper though, Airbnb is a profitable business that has carved out a strong market position. Are they getting it wrong lately though, with a position that puts hosts above travelers? Or are there other reasons for the slowdown?
CrowdStrike is a rockstar in the technology world, with great branding and a founder known for his love for motorsport and even his participation. Cybersecurity can be cool it seems, but nobody thought it was cool when CrowdStrike’s update broke Windows machines across America in the past week. With the share price suffering a huge slide in the aftermath, is this a buying opportunity? Or could this be the knock to CrowdStrike’s growth that it cannot afford at this valuation?
Costco is famous for two things: cheap hotdogs and a membership model with subscription fees. The cost of the hotdog might be staying put but the membership fees aren’t, with Costco hiking the fees for the first time in years. That’s grabbing all the headlines right now, but there’s far more to the story. With such a strong run in the share price, is it overcooked? Or is the current valuation justified?
Darden Restaurants is a full-service restaurant group, which means they are scaling a business model that doesn’t like to scale. This gives them plenty of runway for growth in a fragmented market, but it means that nothing comes easily. Still, through a combination of organic growth and acquisitions, the business has pulled off decent returns. Does pressure in the restaurant industry offer an attractive entry point, or is this wise to avoid for now?
MAGIC: The Gathering. Baldur’s Gate. Monopoly. NERF guns and Transformers. These are just a few of the brands in Hasbro’s impressive portfolio of businesses that focus on helping people have fun. Shareholders have been having far less fun than the customers, with revenue under pressure and Hasbro in the midst of a painful turnaround strategy. Could 2024 be a year of improved fortunes, or do the profits remain little more than a fantasy?
Despite boasting 17 consecutive years of dividend increases, Emera has been an underperformer on the market relative to a peer like Next Era Energy, which we recently covered here on Magic Markets Premium. As we continue to operate in an environment of higher rates and a focus on yields, does Emera offer compelling value, or is this more likely to be a value trap?
Under Armour is a bit like ordering Nike on Wish. As the joke goes, you aren’t quite getting what you thought you paid for. The business operates in the apparel market, yet it has struggled to gain proper traction with consumers. The leadership of the group is now in disarray, after the sudden departure of the CEO and the return of the founder to that role. Is Under Armour truly broken, or is this an interesting speculative play?
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