Am I the only one who's excited here? Consumer Disc index is up nearly 2% the past week and off the back of some sound results beat ultra low expectations.
AX1 is my top consumer stock. I see the low current expectations combined with current earnings momentum and growth strategies to provide significant upside potential.
My thoughts are if they are growing earnings at 20% then their actual PE is 11x and they are trading 34% below their 5 year average PE of around 17x (minus 2015 merger). Note they are also buying back their athletes foot franchises which should allow for additional sales, future revenue growth and return on equity.
Add that cheap valuation / earnings momentum with the potential of the international growth and online strategy and you could see PE expansion towards 20x... note that LOV/BBN and couple other retail stocks already trade at 18x+ multiples....
The effect is a 80% upside plus div....
Keen to hear everyone's thoughts and DYOR!
AX1 Price at posting:
$1.36 Sentiment: Buy Disclosure: Held
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