저자: 미상 · 외국인
요약 보기
버핏의 Ulta Beauty 신규 매수(약 2.5억 달러) 공시를 계기로, 해당 종목의 FCF·ROIC·마진·부채 등 재무지표를 점검하고 DCF 모델로 내재가치 $485(4% 성장률 기준) 산출, 33% 상승여력을 제시. 다만 최근 1년 주가는 -28%로 소매 섹터 전반이 부진했고, 할인율·성장률 가정에 따라 가치가 크게 달라진다고 언급. 시청자에게 자체 판단을 권유하며 매수 검토 가치를 시사하는 내용.
다듬은 글
every quarter super investors release their updated portfolio with their buys and sells for that particular period now today our focus is on Warren Buffett who has added Alter Beauty as a new position spending around a quarter of a billion now when we take a look at Ulta beauty we can see this company is trading right there at its 52 we low now with news of this being released after hours yesterday we can in fact see it is up around 13 % now trading at 371 still though it will be towards the mid to low end of that point and we want to understand should we also be looking to add this company into our own portfolio and we're going to do a deep dive we're going to firstly start off with understanding the metrics behind Alter Beauty and that leads us to the free cash flow per share now typically we want to see consistent increases over longer term something we pretty much do get with this company in fact nearly 10 times growth over the last 10 years and anticipated over the next 12 months to continue that growth we also like the sales growth double digit every single year by that Co year which is completely justifiable where we had lockdown consumers were unable to go to their favorite stores and buy the appropriate products even in the more recent year 10% in 2024 we can still see that growth continue and when you zoom out looking at it from a numerical perspective we can see nearly four times growth from 3 billion to 11 billion over over the last 10 years and one of the things we love about this company is the fact that they have a very minimal amount of shares outstanding and have been doing some nice share BuyBacks over the last few years which is always a great sign for investors ultimately returning excess cash to your pockets and giving you a larger portion of control of the company roic very important metric we want to see 10% or more give us faith that looking very strong pretty much double digit every single year by that Co year 39% in 2024 38 over the last 12 months looking incredibly attractive for not just investors who currently hold a position but also potential investors too now on the margin two things we want to see first thing a minimum of 16% which is something we don't get from Ulta beauty pretty much straddles around the minimum level that we want to see and the second thing that ideally would like to see from high quality companies not just an increase to their top line but also some operating efficiencies not something we see for the large part of the last 10 years something though we would like them to do moving forwards and free cash flow margin at a minimum we want this at 5% or more pretty much what we do see at least over the last seven of the last 10 years so that is a positive sign and finally the net debt to ebit DAR which is nd mization this correlates to the balance sheet strength below three is what we want to see that is what we get it has also been decreasing and remember these are the number of years it would take the company to pay off all of their debt net of cash on hand 049 in 2024 expected a small growth to 0.59 over the next 12 months so the balance sheet does look to be very strong now other parts of our analysis also include looking at Insider and institutional movement starting off with insiders well 39% 14 million worth of sales over the last year and what we can in fact see it isn't too common for insiders to be selling it is every few months that we notice this the more recent quarter of Q3 39,000 so a fairly trivial amount quarter 2 around 253,000 and quarter 1 the largest sale around 13 million now we will take a look to see who these insiders are and in fact we have the director in the more recent period of 100 shares and one of the largest around 3,100 by an Insider on the 19th of March now you could argue these are fairly outdated plus the more recent one on the 2nd of July is a fairly small amount but typically we do mention that Insider selling we see it as something that isn't a bearish signal as inside of sell for many reasons personal and financial now moving on to the institutional ownership just above 90% 2.94 billion worth of sales over the last year with a little bit more buys 3.54 to be exact over the same period And when we look at the more recent quarter we do notice a marginal amount more of buyers than sells with the previous quarter we see the complete reverse a little bit more selling than buying now overall yes institutions are buying a little bit more and in the more recent quarter but as always do your own due diligence and never copy what these insiders do now we also want to let you know that if you want access to this or any other articles all completely free you can click on the pin comment below to sign up and we have also released our 35 undervalued stocks for consideration in August where we also detail those that sit within our portfolios so do go check that out by clicking below moving back then to the historical performance as we can see -2 % over the last 12 months over the last 10 years though you still would have outperformed the S&P up 238% and we can in fact see a forward P sitting just below 13 at 12.81% s growth over the longer term then we can see that very clearly graphically but the main thing we want to point out is what story can we see on the bottom line net income 257 million in 2015 1.29 billion in 2024 so again some very strong growth not just on the top line but also the bottom line and fairly consistent always a great thing to see with companies again no surprises in that Co year where both their revenue and their bottom line net income did fall the other thing that we want to point out in their balance sheet is a quick health check where we look at the total cash versus their total debt 539 million in 2015 525 in that latest quarterly report so when we look at it from a graphical perspective very inconsistent and hasn't moved too much when we look at it just from a 10-year point of view now the main reason why we do this in that number in isolation doesn't really tell us anything which is why numerically and directionally we compare it to the total debt and this has gone from around Z in 2015 to around 1.9 billion and when we look at it from a graphical basis we can see over the last few years it hasn't moved too much and in fact when we looked at the net debt to ebit dash shortly before we saw that it did sit fairly low in fact well below one and therefore overall we can say the balance sheet does look to be secure what we also like to do is look at previous performances against analyst targets as well as future projections very solid beats here four out of four so a 100% track record over the last four quarters now they are anticipating a drop of 8% to the year- on-year EPS next quarter but as we can see the next three are looking positive and if they do hit that EPS estimate of 28.1 n the forward P will come down try 11.7 something that you could argue does look to be very good in terms of that valuation now speaking of valuation we're going to take a look at some underlining metrics the first one taking a look at the grading in specifics to the valuation now they get a C+ when we look look firstly against the P nonap basis of 12.81% in relation to the sector median and we can see depending on which valuation metric you use some of them they are trading at a little bit of a discount however some of them they are also trading at a bit of a premium hence why for this valuation part they do get that C+ we continue with the gradings moving on to the growth where they actually get a d plus now you would be questioning why that is given the revenue year-on-year growth sits at 8% with the sector at two as well as forward looking 6.21 and the sector at 3.6 but the thing that drags this down is the earnings per share getting a D+ growth over the next 3 to 5 years around 6.9% on an annual basis whereas what we have here for the sector does sit a lot better at just under 11% then we move on to the final grading which is the profitability now it does add an a which is good to note gross margin looking very healthy at 43% versus the sector 37 and the bottom line does also look stronger 11.1 versus sector 4.6 and finally we also like to point out that their cash from operations does sit very very large 1.33 billion versus the 272 from the sector median now just a quick conclusion for this part a double buy seeking Al from W Street a hold from quum C+ on valuation D+ on growth with an A on profitability now before we get to our own valuation let's have a quick comparison against others essentially in the retail sector we have Dicks Sporting Goods chewy Bath and Body Works as well as a few well-known others and we want to see if there are any other trends that we can spot as well over the last year Ulta beauty one of the worst performing negative - 28% but one thing we can take from here other than dks every single other company in this sector has actually had a negative performance so something to bear in mind this whole sector has been struggling over the last 12 months when we expanded over the last 5 years we can see as well very poor performance only up 2 and a half% for Ultra Beauty and we can also see a few others that have had a similar poor performance chwi as well as five now when we expand this over the last 10 years we can in fact see they are one of the better performing up 2 138% and as we said at the beginning of the episode outperforming the S&P during this time now whether or not you believe these really good metrics or really good performances do remember that past performance is not an indicator of how this company will perform in the future now now our intrinsic value of $485 how we got to this well we ran it through the DCF model where we have the free cash flow year- on-year average growth for the last 10 years at 48% % and forward looking we've gone for a very low 4% rate now we have a low medium and high today at 46 and 8 and we are going to use the low rate of four just to be extra conservative especially if you do believe we are heading into a recession with that discount rate of 8% then we we get the $485 price which ultimately gives us 33% upside now if you believe that is way too conservative well at 6% just for transparency it will take the intrinsic value to $564 indicating 55% upside and at the 8% as we can see here 656 80% as always though these numbers are fairly subjective so you can grab a copy by clicking on the pin comment below and running through your own numbers whether it is for Ulta beauty or any others so at the 4% level we do take it to the final slide here where we get that intrinsic value that we just mentioned but we always like to add a margin of safety on this episode and at 10% is what we start off with and execute if now if you believe that it is a buy up to $437 and then we keep going till it's near the current trading price and in today's episode we can see around that price $1 shy you are getting a 25% MOS and that is after the pop that we see that Warren Buffett has now added this company into his portfolio so 25% MOS with upside of 28% from Wall Street at $468 definitely means this is one that you should consider in the portfolio whether or not you want to buy though do give us your thoughts below as we saw both Wall Street and Seeking Alpha do consider this a buy as well as always if you enjoyed the episode value was as well to sign up to the free weekly newsl below and if you want to come and discuss our weekly buys and sells in the patreon as well we'll see you there by
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