Roots Corporation (ROOT-T) Stock Predictions - Stockchase
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Roots Corporation (ROOT-T)

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Roots Corporation

ROOT-T

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Roots Corporation (ROOT-T) SAVE Dec, 10, 2018, 4:12 pm

3.22 0.24 (6.94%)

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DON'T BUY
Roots Corporation(ROOT-T) 

December 4, 2018

It's a case on not buying stocks at an IPO. IPO expectations were too high, and Roots has struggled since then. There are forecasts that in 2020 it will earn 73-cents a share vs. 90 cents at the IPO. Managers overpromised at the IPO, so the stock got punished. It trades at 5.6x enterprise value to EBITDA, lower than its peers. But he fears that expectations are still wildly unrealistic. Doesn't see 49% earnings growth in a time when sales are moderating.
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It's a case on not buying stocks at an IPO. IPO expectations were too high, and Roots has struggled since then. There are forecasts that in 2020 it will earn 73-cents a share vs. 90 cents at the IPO. Managers overpromised at the IPO, so the stock got punished. It trades at 5.6x enterprise value to EBITDA, lower than its peers. But he fears that expectations are still wildly unrealistic. Doesn't see 49% earnings growth in a time when sales are moderating.
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Brian Madden

Senior VP , Goodreid Investment ...

Price Price
$4.540
Owned Owned
No

TOP PICK

The buying opportunity came after their Q1 report where they blamed bad weather for poor sales. Otherwise, the quarter was solid: over 6% same-store sales growth, gross margins increased and they're expanding in the U.S. gradually--about to open a store in Boston. Well-managed. They have a great online presence, so there's also growth here. (Analysts' price target: $15.06)  

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The buying opportunity came after their Q1 report where they blamed bad weather for poor sales. Otherwise, the quarter was solid: over 6% same-store sales growth, gross margins increased and they're expanding in the U.S. gradually--about to open a store in Boston. Well-managed. They have a great online presence, so there's also growth here. (Analysts' price target: $15.06)  

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Don Lato

President, Padlock Investment M...

Price Price
$10.500
Owned Owned
Yes

PAST TOP PICK

(Past Top Pick, January 25, 2018, Down 10%) They had a disappointing Q1. Roots blamed this on the bad winter weather, which is valid. He'd still buy it. (Also a top pick this day.)

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(Past Top Pick, January 25, 2018, Down 10%) They had a disappointing Q1. Roots blamed this on the bad winter weather, which is valid. He'd still buy it. (Also a top pick this day.)

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Don Lato

President, Padlock Investment M...

Price Price
$10.500
Owned Owned
Yes

WATCH

It took a huge beating after the IPO last year and then came back.  He has difficulties with their forecasts because they are often more optimistic than they should be.  They are moving into the states which will be costly.  They are building a new distribution center but they take a while to ramp up.  He thinks they will have tough sledding going forward and will not hit their profitability goal so there won't be a dividend any time soon.  Their same store sales went up and their revenues went up, so that is positive.

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It took a huge beating after the IPO last year and then came back.  He has difficulties with their forecasts because they are often more optimistic than they should be.  They are moving into the states which will be costly.  They are building a new distribution center but they take a while to ramp up.  He thinks they will have tough sledding going forward and will not hit their profitability goal so there won't be a dividend any time soon.  Their same store sales went up and their revenues went up, so that is positive.

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Benj Gallander

President, Contra the Heard Inv...

Price Price
$11.190
Owned Owned
No

TOP PICK
Roots Corporation(ROOT-T) 

January 25, 2018

It suffered after the IPO.  He Poo-Poo’ed it last time and then a week later he read a great report.  The argument was that new management would ring out better efficiency.  They are down 23% in SKUs.  It gives you a lower quantity of merchandise and you buy more from suppliers.  Less is more.  They do a fair online business in the US.  There is potential to expand down there further down the road.  (Analysts’ target: $14.00).

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It suffered after the IPO.  He Poo-Poo’ed it last time and then a week later he read a great report.  The argument was that new management would ring out better efficiency.  They are down 23% in SKUs.  It gives you a lower quantity of merchandise and you buy more from suppliers.  Less is more.  They do a fair online business in the US.  There is potential to expand down there further down the road.  (Analysts’ target: $14.00).

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Don Lato

President, Padlock Investment M...

Price Price
$11.710
Owned Owned
Yes

COMMENT
Roots Corporation(ROOT-T) 

December 12, 2017

This was a $12 IPO recently. When they went public, it was secondary so the money was being paid to the founders of the firm, and not to the company. So, the company still has to grow. Their category is not a high growth one, just basic attire. Projected growth rates were not that high. The company is really having to prove itself. It is hard to see that what they offer is so unique.

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This was a $12 IPO recently. When they went public, it was secondary so the money was being paid to the founders of the firm, and not to the company. So, the company still has to grow. Their category is not a high growth one, just basic attire. Projected growth rates were not that high. The company is really having to prove itself. It is hard to see that what they offer is so unique.

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Christine Poole

CEO & Mana, GlobeInvest Capital ...

Price Price
$9.950
Owned Owned
No

DON'T BUY
Roots Corporation(ROOT-T) 

November 30, 2017

They recently completed their IPO.  It struggle a bit out of the gate and has treaded water ever since.  It is a fashion brand that has been out for long time.  He does not see the growth here.  There are a lot of better places to be in retail.  Where is the expansion going to come from.  He does not see the brand translating well into the US.

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They recently completed their IPO.  It struggle a bit out of the gate and has treaded water ever since.  It is a fashion brand that has been out for long time.  He does not see the growth here.  There are a lot of better places to be in retail.  Where is the expansion going to come from.  He does not see the brand translating well into the US.

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Don Lato

President, Padlock Investment M...

Price Price
$10.050
Owned Owned
Unknown

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