ADH is an example of a fantastic buy opportunity lying in plain...

ADH is an example of a fantastic buy opportunity lying in plain sight.
Consider the following:
1. The directors have released a series of trading updates which have effectively been serial upgrades. The chair and CEO presentations at the AGM included data showing that ADH on-line channel was on a trajectory that could see it surpass TPW sales at 31 Dec 2020. And its on-line margin and contribution smashes TPW’s meagre returns. These statements remain on foot and have not been revised or withdrawn.
2. ADH have a deserved reputation with landlords for being canny without the brutality of Premier. Capex is being more than funded by landlord contributions, and the new DC is not on ADH balance sheet. At 31 Dec 2020 net cash is likely to be north of $30mm, so the interim dividend is going to surprise on the upside.
3. ADH loyalty program “Linen Lovers” is class leading. ADH have executed their stated “Omni-channel” strategy better than any small mid-cap peers, and has reinforced the value of a stores + on-line offer.
4. Mocka has to be close to “ small M&A deal of the year”. Yes, the larger than expected earn out payments will impact FY21 earnings, but the shareholder value created dwarfs the expense.
3. Valuation compared to peers is certainly not challenging, indeed as some analysts have pointed out ADH is bottom quartile.
4. In March 2021 ADH is highly likely to be added to the ASX300, providing some passive sector buying support, and re-rating impetus.
This is not financial advice, do your own DD.
LS9