Special Red Flag Alert – Blurring the Lines
Special Red Flag Alert – Blurring the Lines
Taking a deep peek into the largest for-profit operator of thrift stores
(Note: I’m thrilled to be collaborating on this report with my friend Katherine Spurlock, a research analyst and former shortseller, who is proud to call herself a “thrifter.”)
Where there's a market, Wall Street finds a way.
That’s the moral of today’s story...
Enter Savers Value Village ($SVV), a roll-up of for-profit thrift stores. It’s also the largest, with 300-plus units in the U.S. and Canada operating under the brands Savers, Value Village, Village des Valeurs, Unique and 2nd Ave.
The company’s IPO captured the attention of investors last year with its robust margins, claims of a “recession resistant” business model, and a forecast that its store base has the potential to ultimately grow to more than 2,000 units.
As it heads into earnings this week, its shares trade at a lofty 28x earnings. Management has primed investors to expect improved results, which is why it’s being added to the Red Flag Alerts list with a yellow flag… to be reassessed after earnings.
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