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Strategies & Market Trends : Value Investing
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To: Nya_Quy who wrote (62805)11/4/2019 2:16:49 AM
From: $Value$1 Recommendation

Recommended By
E_K_S

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RE: TLRD




"... it is not to difficult to find something that indicates that it's current situation is indeed crappy."

The company is still suffering from the acquisition of Jos A. Bank in 2014. They took on a large amount of debt for an acquisition that, in my opinion, wasn't needed and their still "paying" for it. They have closed about 25% of the Jos.A. Bank stores since they acquired the company which obviously isn't a great sign. This along with the decreasing sales and "cultural shift" from the more "Business Professional" buyer to a "Business Casual" buyer is impacting the company due to their focus on the former.

"However, the question is whether this crappy situation will become less crappy in 2-5 year or so."


I think the company will definitely become "less crappy" in 2-5 years. The large debt load is manageable. I fully supported the dividend cut as it would allow the company to focus on allocating that capital to debt reduction. Also, the company generated approx. $630 Million in FCF from 2016-2018 and I expect them to generate at least $500 Million in FCF from 2019-2022 which would allow them to pay off the 2022 senior notes AND leave some cash for share buybacks and further debt reduction. Their partnership with the NFL & NHL is also quite encouraging.
In terms of the "cultural shift", the company is fully aware of that, so hopefully they can capitalize on it.

Have fun analyzing!

I bought shares last month at $4.35.
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