I've just changed my rating to buy on this one, and just bought another bunch. You should know that my usual preference is for shorting rather than longing.
The maths can obviously work in a favourable or unfavourable way, but there can be a compounding effect.
The old 5% difference to many factors of the business exercise can be very powerful. If they can increase the number of individual walk-ins per rebel store by 5%, and the conversion rate of walk-ins by 5%, and the number of transactions per walk-in by 5%, and the number of second walk-ins per year by 5%, and then the average $ sale by 5%, and the average margin by 5%, you have revenues up by 20% and profits up by even more. It all add up, and management have a track record, so not really good to bet against them IMO.
Still as always - we'll see what happens - but incremental improvements is all that is required to hit the (stretch?) target.
Rebel is the only national specialised sporting equipment and apparel retailer. SUL will be able to collect big dollars if they get it right.
SUL Price at posting:
$5.48 Sentiment: ST Buy Disclosure: Held
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