Andrew Left Might Be On To Something With Restoration Hardware
Wayfair Inc. engages in the e-commerce business in the United States, Europe, and internationally. The company offers approximately 10 million products for the home sector under various brands. It offers a selection of furniture, décor, decorative accents, housewares, seasonal décor, and other home goods through its websites.
Several weeks ago, Wayfair stock rocketed higher after the online furniture retailer reported that its revenue-growth rate doubled amid the coronavirus pandemic. Apparently, people who are stuck at home are buying home furnishings. On the news, price took out the weekly supply at $150.
Williams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home. It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, etc.
Yesterday, Williams-Sonoma reported a surprise rise in quarterly same-store sales as the retailer's online business boomed amid coronavirus-led lockdowns. Again, people who are stuck at home are buying home furnishings. On the news, price took out the monthly supply at $77.
Restoration Hardware (RH), together with its subsidiaries, operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, bath ware, décor, outdoor and garden, tableware, and child and teen furnishings.
Activist investor and famed short seller Andrew Left of Citron Research said Tuesday that Restoration Hardware Holdings, Inc (NYSE: RH) is the “clear winner” of a potential large scale shift in American workers outside of expensive, densely populated urban centers.
Left said many of the top market performers of the past couple of months have been short-term work-from-home trades like Wayfair Inc (NYSE: W), but Restoration Hardware is a long-term play on what he sees as a secular shift in the US economy.
In the near term, Left says the company should generate the strength of its business by posting positive revenue growth in the second quarter, the quarter many analysts say will mark the bottom of the current downturn.
The time when Peleton was having their public relations fiasco, Andrew made headlines saying Peloton is heading to $5 by the end of 2020 unless Peloton invents a piece of equipment that works out for you.
Andrew also said the SEC should HALT Inovio Pharmaceuticals Inc.’s stock and investigate claims of designing a vaccine in three hours and placed a $2 price target on the stock.
Andrew also took to Twitter several months ago to talk about Tesla's valuation.
But in the case of Restoration Hardware, Andrew might be onto somthing and has a near term price target at $400. Andrew thinks longer term, if the company can generate revenue of $20 billion from $3 billion today, the price can move to $1000.
Warren Buffett likes the sound of that as Berkshire has at least four furniture retailers among its portfolio. He bought shares Restoration Hardware late last year. Buffett love companies that buy back their share or offer dividends. In the case of Restoration Hardware, since 2017, RH has repurchased about 60% of its previously outstanding stock.
Look for price to at least test the highs ata $257 as earnings are coming up in June.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted Using LeoFinance
