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The strategy behind this fundie’s Twitter short
Totus Capital’s Ben McGarry explains why he’s bullish about HelloFresh
Which stock are you most excited about that you think is being underappreciated by the market? In a sell-off like we have seen in tech, some babies inevitably get thrown out with the bathwater. One of these is German-listed HelloFresh, the world leader in meal kits.The business model has structurally higher margins than supermarket retailers and will be able to price competitively against them in a rising price environment.E-commerce is highly discretionary, but we believe HelloFresh is more staple-like in nature and has a recurring customer base that drives most of the profitability.The business is both profitable and free cash flow-positive, and still growing sales at over 20 per cent after more than doubling during the COVID-19 boom.We love alignment and we love insider buying. HelloFresh has bought back stock during this sell-off and the chief financial officer recently bought shares on market.
While MMM will likely always be the smaller cousin to HFG, a lot of the key points above hold true.
MMM just needs to reach the point of scale where we are cash flow positive and then market sentiment will turn quickly.
It would be nice to see some more director buying though!
