Opinions
Peter Imhof
Sleep Country Canada
ZZZ-T
WATCH
Oct 26, 2018
$26.530
Stock price when the opinion was issued
household goods
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PAST TOP PICK
(A Top Pick Nov 30/17, Down 37%) The 2018 earnings have kept pace, the valuation multiples have simply collapsed. They trade at 7.3 times EBITDA versus historical levels of 11 times. They still see new store openings, maybe not with the same growth rate. Housing has slowed, which may slow sales. Still a great bet and very cheap. If he had new money, he would be buying.
household goods
HOLD
He has liked this stock for some time. They disappointed analysts last year and that is now behind them. You should start to see very good year over year comparisons. The multiple got traded down into 12 times earnings. As the comparisons improve he expects the multiple to improve taking the stock back to the mid-$30s share price. It may be by the end of next year. Yield 3.6%
household goods
DON'T BUY
A great one to buy at the height of Covid. This has come back with a vengeance. Amazing Q4 report and the housing market is on fire. Factors lined up for ZZZ. They've managed debt well. It's a one-product business, though, so keep that in mind and don't pay a big PE. Their growth will follow wider economic growth rates. Also, competition has heated up a lot.
household goods
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One of the better IPO's and had run up a lot, but it has been struggling lately. It's facing competition from new players offering cheap beds. They're good operators, and they dominate the Canadian market share, especially since Sears went out of business. The valuation is not expensive and has decreased. It could possibly get bought. He's monitoring the stock.