Excellent taxonomy of beaten-down categories here. The distinction between coiled springs and falling knives is particulary useful since most investors lump them together when they actually represent very diferent risk profiles. BBWI is interesting at 7x with that historical 12x median, but the guidance reset is tough because it shows management might not have clear visibility yet. The SANG idea catches my attention more, since unlevered balance sheets with improving FCF dynamics tend to offer cleaner setups when sentiment shifts.
Nice way to separate the different kinds of underperformance and what they imply about market expectations, like how reset expectations from periods of stagnation are different from sharp declines from the loss of earning power.
FMC would fit. Would love to see an analysis on it.
Excellent taxonomy of beaten-down categories here. The distinction between coiled springs and falling knives is particulary useful since most investors lump them together when they actually represent very diferent risk profiles. BBWI is interesting at 7x with that historical 12x median, but the guidance reset is tough because it shows management might not have clear visibility yet. The SANG idea catches my attention more, since unlevered balance sheets with improving FCF dynamics tend to offer cleaner setups when sentiment shifts.
Nice way to separate the different kinds of underperformance and what they imply about market expectations, like how reset expectations from periods of stagnation are different from sharp declines from the loss of earning power.