DUFRY: With multiple datapoints out about relaxed travel restrictions on a global scale, we’re upping DUFRY (Best Idea Long) to the top slot on our Position Monitor. Our conviction on the name is strong across durations, and think that there are many ways to get paid here. We outline our thesis in our latest note…DUFRY | A Coiled Spring. We also recently hosted a Fireside Chat with DUFRY’s CFO (Video Replay Link: Click Here), and it’s clear to us that aside from business continuing to get better on the margin, this company will emerge from the pandemic more quickly and far more profitable than the consensus thinks – with a major call option on getting paid by growth in Hainan (Alibaba JV) over a TAIL duration. Ultimately by year 5 we’re looking at CHf14 in earnings power. Give that a 20x multiple (prev peak was 18x, but now it will be a more profitable, higher margin and better capitalized company with higher returns) and you get a stock that’s CHf280 that compares to its current price of CHf56. If you own the ADR, you’re talking a ~$6 stock going to $25. A BIG idea, to say the least. This name at current levels is the most compelling risk/reward right now on our Best Ideas Long list.
SNBR/TPX/PRPL/MFRM…On Friday we presented our Black Book on why the mattress industry outlook is bleak – at best. Replay Video Link: CLICK HERE. Key conclusions are as follows.
