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Strategies & Market Trends : Value Investing
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From: $Value$10/17/2019 7:52:17 PM
1 Recommendation

Recommended By
The_Commodore

  Read Replies (1) of 78774
 
Tailored Brands (TLRD). Company in the midst of a transformation period.

Trading at a price/sales ratio of 0.07.

Trading at about 3.5x earnings.

$630 Million in FCF from 2016-2018

The large debt load is a challenge ($1.15 Billion), but one they can over come with their free cash flow. Suspending their dividend was a smart move as debt repayments are the most efficient way to allocate capital. I'm expecting at least $500 Million in FCF from 2019 – 2022, which would pay off the roughly $230 Million in senior notes due in mid 2022, as well as leave room for share buybacks and more debt reduction along the way ($900 Million remaining on term loan.)

With a market cap of only $225 Million, the company can buy back at least 50% of the shares outstanding and still pay down debt substantially.

I found the company's recent partnership with the NHL & NFL to be a fantastic decision that could boost both revenues and profits.

Bought in at $4.35.
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