SFIX | New Short Idea. Back To (Broken) IPO Price. Ran out of TAM. Chasing capital-intensive lower-margin growth. Financial model destruction is permanent. This company should never have come public. Short aggressively on reopening strength in upscale apparel. Once we’re out of Macro Quad 2, the same time we de-risk reopening strength in demand, is when this name has Best Idea Short written all over it.
Advance Auto Parts (AAP): Removing AAP from our Short Bias. We’ve been getting increasingly bullish on the Auto Parts retail space, and though the company missed the quarter last week, it showed nice momentum quarter-to-date in its professional business. That’s likely to continue as we anniversary the collapse in miles-driven, and as stimulus continues to buoy the DIY side of the business. Investor event in April, which is perfect timing to lay out its reopening strategy. Estimates for this year look increasingly conservative. Cyclical tailwinds bullish for Car Parq, which will help the whole space, including AAP.
