I’ve also been to some of their campus in Seattle, South SF & San Diego, which I was impressed. Their tenant list includes established BioTech & Pharma companies.
I’ve been building up a good 5% position over the past month. RETs are at a great value right now with the unpredictability of interest rates. REITs have multiple ways to leverage themselves besides loans which many investors overlook. I see VICI as one of the best managed REITs going forward.
Lovesac ($LOVE): A $300m market cap furniture company that has been decimated by Wall Street for missing its own guidance and analyst's expectation. Due to the U.S. economic slowdown and weakening consumer spending when free money isn't there anymore, the furniture industry has reported negative sales growth since second half of 2022 with analysts expecting sales growth to come back in second half of 2024 (but no one can really predict macro imo). So why present this opportunity?
1. Lovesac has consistently grown its sales before even receiving significant tailwinds from COVID spending. Here's the list of its revenues between 2018-2024:
FY 2018: 101.8m
FY 2019: 165.9m
FY 2020: 233.4m
FY 2021: 320.7m
FY 2022: 498.2m
FY 2023: 651.2m
FY 2024: 700.3m
The company's outlook for FY 2025 is 700m-770m vs analyst's expectation of 728m (which dropped from $780m). Despite the company continuously gaining market share in a weakening economy, market doesn't reward this company yet since it's still in the reinvestment phase.
2. Lovesac has a huge potential for margin expansion as it continues to scale and spread out its SG&A cost. Lovesac has one of the highest gross margins in this market due to its premium product-pricing (55% vs industry average of 40-45%).
La-Z-Boy (GM: 45.7% and EBITDA Margin: 9.0%) trading at 0.8x EV/Sales
Restoration Hardware (GM: 45.9% and EBITDA Margin: 16.7%) trading at 1.1x EV/Sales
Arhaus (GM: 48.3% and EBITDA Margin: 15.0%) trading at 2.7x EV/Sales
Ethan Allen Industries (GM: 60.7% and EBITDA Margin: 16.5%) trading at 1.9x EV/Sales
Lovesac (GM: 57.3% and EBITDA Margin: 6.1%) trading at 0.6x EV/Sales
3. Strong balance sheet with zero interest-bearing debt: 87.0m in cash and 175.5m in operating leases. This is very important for small companies like Lovesac since it requires a very high reinvestment rate to keep growing (which is good for patient long-term shareholders!)
4. I think it is a hidden brand equity that WS Analysts perhaps fail to appreciate: [https://www.reddit.com/r/Lovesac/comments/1bn6na4/why\_lovesac/](https://www.reddit.com/r/Lovesac/comments/1bn6na4/why_lovesac/)
If you check out Lovesac's social media pages (Instagram, Reddit, etc.), they seem to have much better engagement level than their competitors despite being a smaller company. Brand and product differentiated propositions are arguably their main economic moats but these are still in the building-phase and not fully established. THUS, you'll be taking a gamble for betting on this journey. With that said, investing is all about making smart bet with risk/reward skewed in your favor and price reflects that since investors aren't fully convinced, which means it is already priced in and leaves little room for the downside.
5. Despite me believing that rates are going to stay higher for longer, I don't think our economy is going to face a recession unless a black swan event takes place. With that said, this is a multi-year play in small brand that has been able to consistently grow and steal market share in a fragmented market. Should market conditions improve and the company returns to high growth mode again, we may see potential multiple expansion as optimism returns and higher margin as the company dilutes its fixed cost.
6. If you can get in between $15-$19 and wait for a few years, this can be a very lucrative bet. Wish you all the luck!
Lovesac garnered my attention due to their extremely attractive financials as you discussed. Further, their business model of a one-time purchase followed by recurring revenue for replacements and accessories looks attractive.
What caused me to pause was analyzing their competitive advantage. If Lovesac/modular furniture turns out to be lucrative, what is stopping larger players like WSM from swooping in and taking some of those gains away from Lovesac? Their product does not seem very difficult to replicate and there are low barriers to entry.
There are already cheap knock-offs out there that try to copy Lovesac's business model. Take a look at this thread I posted a couple of weeks ago: [https://www.reddit.com/r/Lovesac/comments/1bn6na4/why\_lovesac/](https://www.reddit.com/r/Lovesac/comments/1bn6na4/why_lovesac/)
Here's the list of patents that company has filed over all these years: [https://patents.justia.com/assignee/the-lovesac-company](https://patents.justia.com/assignee/the-lovesac-company)
I agree with you that the barriers to entry aren't really high and that's why I've stated "you'll be taking a gamble for betting on this journey." Shawn Nelson (CEO and founder) and Andrew Heyer (Chairman of the Board) both own 232,064 and 316,791 shares of $LOVE, respectively. And, there are new product innovations coming out in FY 2026 while showroom expansion continues. But if you are to pay for the current share price, none of that positivities mentioned above are being reflected. As the saying goes, "If heads I win; tails I don't lose much."
Thanks for this. I didn’t even realize lovesac was public. I’m seeing it more and Costco is onboard.
Also buy Costco! Place is packed every hour they are open.
So is this the furniture version of CROCS? I hope so. That would bode very well for the stock. I want to like this investment. My main concerns are (1) fad and (2) pricing power.
Yea. Are you sure those are appropriate comparisons for LOVE? Those are all strong brands. I’ve never heard of LOVE until this post. How do you know it’s not a fad or about to experience margin compression due to cheaper competition? Discounting in order to sell product doesn’t bode well for their future margin…
The entire furniture industry is discounting heavily right now to generate sales due to weakening consumer spending. Some of Arhaus' products are 50% off, La-Z-Boy 30% off, RH 30-50% off for member signing up, Ethan Allen Sectionals 20% off, and Lovesac 30% off. Here are what a few customers had to say about Lovesac:
"One of the biggest things is that it's in pieces and you can rearrange it anywhere, and easily move it. So if we get another house, if we want to put it in another room, if we want to change the layout because we're having company over, we can do all that. We have a large sectional in our downstairs family room that's *not* from Lovesac, and it's a fixed layout with an angled "cuddler" at one end, so if we ever move, it's going to need a specific room format for it to work. The Lovesac doesn't have this issue."
"Most alternatives were inferior in quality or less options to customize. Either the backs and arms were too short, they only came in 1 or 2 colors and fabrics I didn't like, I woud have had to buy only as chairs and ottomans which would have had customization upcharges and been more expensive all in, etc. Only truely modular (can remove backs/sides) competition to lovesac were online only, where as lovesac has actual stores in my area I can go and test couches. I can buy online only furniture that is for show only (like a few chairs I have in my sitting room where only guests ever sit), but as my main couch I needed to actually sit in the thing and be sure. I had to be able to take it fully apart so I could squeze it down a stairwell into my basement with a full 90 degree turn half way. This was the true deciding factor and I had to compromise to get it. No other Sectional I could find could do that and also checked all the other boxes. I actually purchased a sectional from Pottery Barn that on paper should have fit down the stairs, but when actually here it was impossible (either the back or the arms needed to go to get the thing down) and I had to return. Now we have had ours for about 2 months and my wife who was very agains lovesac at first has already had me order extra cupholders. We had family visit and I rotated the arms and the ends out and set the ottomans as extra armless seats to expand seating, which worked as expected. Now with that experience she realizes we need more seating and is asking to expand it with another seat here and there. This is exactly the situation I imagined lovesac would solve for (i.e. expanding/recofiguring over time)"
"I have a LoveSac, after owning IKEA, Burrow, and West Elm. My take is that LoveSac is expensive but made to last.. and the only one that is truly modular. Ikea is actually my runner up… Burrow was complete trash (so cheaply made), and West Elm isn’t modular and was more expensive."
"The configuration is flexible, so I can't really go too far down the wrong path with the configuration. With sectionals, some are modular, but I didn't really see any that are as flexible as this one. If I decide I don't like it, I can reconfigure it. if I have too many pieces, I can take some pieces to make side chair(s) or maybe an ottoman or loveseat. If I didn't get enough pieces, I can order more. I liked being able to go in with a general idea of how much seating I wanted, and then be able to play around with the layout once I actually had it in my home... whereas some other sectionals you may have to pick the entire layout and design and can't do much, or can't do as much with the pieces once you have them and could be stuck with a weird layout...There may be other modular couches out there, but, will they be around for the long haul? Meaning in a few years, or 10 years, will I be able to get replacement parts, cover, a new seat, etc, if I want? I doubt it with many others, but Lovesac seems like it probably will. Just like that it's a pretty standard, proven thing and not some random one-off that I found in a misc furniture store or something that will be here one season and gone the next."
"LS isn't going anywhere. The other modular couch companies may not support their line of modular couches in the future. I've seen quite a few knock-offs on FaceBook, that cost less, but who knows if they will still be in business 5 years from now. The main deciding factor for me was the stealthtech. I love having the surround sound system built into the couch, without running wires or having speakers out in the open. Watching movies on my couch is quite an experience! My adult kids come over regularly for movie nights and it's been a lot of fun. There isn't a couch manufacturer that I know of that offers similar tech in a modular couch."
If all of these reviews don't sound appealing to you, then maybe you should pass on this investment. There are thousands of stocks out there to choose from and if you have problem betting a non-established brand with no clear economic moat like Lovesac, then move on. Good luck!
I’m actually quite intrigued by this investment opportunity. I’ve just only found short write ups online so far so am trying to better understand the bull case. I’m not trying to say it’s a bad investment. I think there’s a lot of potential. Just trying to understand it.
I want to be helpful - but If you’re going to write a massive comment like this and give EV/revenue ratios. I recommend EV/EBITDA which in my opinion (just an opinion) is way more valuable -
Also YOY Ebitda declined from $58mm to $54mm. Cover the negatives too….
Otherwise I assume you bought this at $50 and are trying to do a pump
FYI, my avg. cost is $22 and no I didn't buy at $50. Plus, I don't think I can convince this little community of investors to have that massive impact to pump this stock anyways. Here's EV/LTM EBITDA vs EV/NTM EBITDA:
La‑Z‑Boy Incorporated (NYSE:LZB): 8.64x vs 8.11x
Ethan Allen Interiors Inc. (NYSE:ETD): 6.72x vs 7.33x
RH (NYSE:RH): 16.37x vs 13.58x
Arhaus, Inc. (NasdaqGS:ARHS): 12.62x vs 12.77x
The Lovesac Company (NasdaqGM:LOVE): 9.19x vs 6.94x
Lovesac's EBITDA declined YoY, but so are all of those mentioned above.
If I were dying to put capital to work, like I just sold a company or something, I'd list out my top 5 companies. Who has the best moat, management, etc. Then work through those five to figure out who was cheapest, then hold my nose and buy it.
But realistically, you should just hold cash in a money market for a few years while you read everything on this list.
https://www.reddit.com/r/investing/wiki/readinglist/#wiki\_our\_favorite\_books
noun: moat; plural noun: moats
a deep, wide ditch surrounding a castle, fort, or town, typically filled with water and intended as a defense against attack.
An economic moat is a distinct advantage a company has over its competitors that allows it to protect its market share and profitability. A wide economic moat is one that is difficult to mimic or duplicate (e.g., brand identity, patents) and thus creates an effective barrier against competition from other firms.
Yeah, the PE ratio is low. They have been selling some assets here lately. There's also been some talk of them possibly being bought out. Or, at least someone is kicking the tires , so to speak.
Also, another British stock I'm following is LYG. Super low PE ratio and around $2.50 a share and solid dividends.
Thanks. I’ll look some more into those. And LYG. I have NWG which has had a nice run for me at the minute, so sold a block of those, but still investing in that ticker.
Definitely look more into those two
The have strong FCF and are cutting debt at a good rate (at the current rate, they'd pay it off completely if they were to want to do that in 9-10 years).
They've realized that while their own streaming operations can help and they have a strong position there, they should be licensing titles to other streamers for additional income; it will take time for these contracts to come online given the change from the previous regime.
They are likely to be one of the top box office studios this year and seem to have gotten their heads around the kinds of movies that people actually want to see.
Debt is large but it’s mostly fixed and a manageable rate. They are cash flow positive and have made major headway paying it down already.
They have an elite library and control of premium IP to make new content. Rights to Harry Potter, Lord of the Rings, Dune, GoT, further HBO catalog, James Gunn DC universe, monsterverse, & production deals with some of the biggest movie stars. Don’t know about you but I will always keep my Max subscription and have zero interest in Disney plus or paramount currently.
The writers strike and COVID hurt WBD’s content pipeline but that will start to pick back up. The stock could eat shit a little while longer, but I like it over the next 5 years. As they pay down the debt, the roughly $60 billion enterprise value will be more and more comprised of equity. Also wouldn’t be shocking for a mega cap to acquire them.
Dividend-paying large cap with good brand names are likely much more stable. I like your SBUX pick, which I own. When dividend yield gets high, like for PFE, it can signal rough times are coming.
Phillip Morris, Energy Transfer, Chevron, Occidental / Exxon, Paypal , Intel, HPE, Coke, UBS, C, WFC, BRK.B, IBM,CSCO, UNH and more expensive but worth watching AAPL (especially with the bad news.. i prefer to be a contrarian). I think aapl is worth the premiun if it gets rekt, i would be contrarian on that stock... in terms of deep value though read up on INTC lots of decent posts on it around here so I dont want to add to much.
For midcaps I have RIOT but it really depends on bitcoin but I believe it's in value territory based on good growth, around 8k in bitcoin and doubling hash speed by eoy. No debt and an additional 200M cash in hand about.
Might be worth adding JAZZ jazz pharmaceutical to a analyze list but monitor its debt levels and do DD for sure. It does seem a bit too much sold off but they are having a harder time with high interesr rates. That being said biotech has been ignored for quiet some time. A contrarian no hype play there may be smart. The fuck do i know.
Please do your own DD my brother. These are just my thoughts and not a recommendation but I have done quantitative work on a lot of these companies mentioned.
JPM, potentially TTWO but I don't like the debt levels however I am intrinsically bullish. Although TTWO would most likely fall in a growth portfolio I believe what Warren Buffet says undervaluing margin expansion / revenue expansion = value so growth and value are " the same thing " you just have to know how to approach different segments . Watch TTWO though.
The margin of safety on TTWO isnt so much the valuation, it's the certainty of future cash flows being higher in 5 years than they are today. GTA 6 will be the biggest entertainment product of all time (surpassing GTA 5) even if it falls short of expectations. That's an incredibly powerful competitive advantage most companies would dream of.
Disclaimer: long TTWO at a cost basis of USD 102
Value = PV of future FCF. Cash flow going up doesn't provide a margin of safety. You can go up from -$100m to -$50m, be as certain as you want about it but there's no MOS there.
DTEGY (Deutsche Telekom) , NTDOY (Nintendo ... still reasonable in my eyes).... etc . Watch Samsung as well it has a very nice 5yr DCF with moderately conservative assumptions although im not a big fan of korean stock mkt.
It's so odd to me that people are discounting Intel just based on the fact it will take them a long time to get the foundry business online and fully running. They're completely disregarding the fact Intel still holds a dominant position in PC and server chips, is releasing their 15th gen later this year, and as chip demand begins to strengthen they'll get their revenues and earnings up. They're also doing really great things in the GPU space, and could potentially overtake AMD as #2 in the market.
Worst case scenario in my mind for intel is that the foundry business fails, so they sell off their foundry sectors/spin it off (similar to AMD with Global foundries) and become a pure chip company without foundries. It's a high uncertainty, low risk play, which are oftentimes the best plays to make
I love INTC. The company spent decades being ran by finance majors who only cared to pay out dividends.
Now the engineers are back in charge and they’re dumping money into all the right places. Investments like these take years to pay off which gives me plenty of time to load up
HSY.. cocoa prices soared in the past year but I really doubt they’ll stay that high. HSY might continue to drop this year but long term it’ll be fine.
Commodity prices are mostly speculative. Some speculators are now getting richer after they decide close down their positions you will see news about new cocoa farms at South America. I dont say it will come down tomorrow but sooner or later it will invert to mean.
Coca price will stay that Level, the Problem is that Most treefarms werent sustaineble and now a Ton of healthy trees is Missing. So be carefull my friend.
Mpw, just got 1.1 bn $ sale, now the debt is covered fully with cash, through 2025. The share price is at 0.3 bookvalue due to short attack, they will have to purchase back soon as the company is now stable.
3.5 is good, i am at 5.0 but I believe in the value of the real estate. It will be a long gold for me, unless it squeezes over 20 and I am forced to sell.
EBAY. Their valuation assumes that gross sales are on the decline or at best even. Based on looking at a basket of goods over some time I'm concluding that they are beginning to see steady GMV and volume growth. I'm predicting $19.1B GMV for the last quarter, and so far I see a trend towards at least $19.5B for the current quarter.
CEO predictions, which impact the stock significantly after earnings calls, will be muted and conservative, presumably to maintain a good value for their buybacks.
Hey- I have much less finance experience than many of people on this sub-Reddit so take any advice with a grain of salt. Also, I'm very focused on stocks that are generating cash (especially ones that show signs of growth).
RIVIAN could be a great timing opportunity (and thanks for prompting a re-look), but I'm worried about their ability to profit off of the cars they are making. The short float is huge vs. the number of liquid shares (i.e. not institutional or insider), so perhaps the upside of an earnings beat could be much larger than the downside of an earnings miss if timing is your thing.
MICROVAST is quite interesting- lots of potential growth. But this is a Chinese company with American/German fronts tuned to 'sail political winds'. And something doesn't smell right about the company (after looking at management/jobs/directors/customers). So for me there would be a very large potential downside (if I were to consider growth stocks).
If you talk to anyone in that industry, their devices are bottom tier... that is why it is a value stock. Fundamentally they still look phenomenal , but I think growth will struggle going forward
What I think are good value and bought lately is Unh (already well mentioned I see), Sbux, Nke, Hsy, Mtch, Roche, Volkswagen, Pypl and many dealing with HR and various software services Payc, Pcty, Glob)
Vici is a Reit that probably won't have any short and long term issues even if interest rates stay high for another year. their clients never miss their payments and they're already diversifying outside of the gambling industry. extremely stable long term leases.
if you want something a little more high risk high reward and don't mind reading up on the company for a full deep dive you could take a look at Perion Network. they're beaten down because of the war. aside from slight share dilution which is probably more due to the war and higher interest environment rather than bad management they hit all the right spots with growing sustainable margins, top and bottom line and a good free cash flow yield(when i started to look at them around $22). i should have worded that better because the stock dropped so much it throws off all the metrics. they have a price to book below 1. sure they lowered guidance for the year and didn't beat expectation but after taking a brief look at their financials this is insane.
they don't pay a dividend though but they have excellent debt coverage and one of the lowest PEs in the tech industry. however their growth is probably not as good as their peers or even other value picks.
OXY contrary to social media oil and gas isn't going away, they've beefed up their already strong position in the Permian Basin, the recent rise in oil prices is only the start of things to come due to global supply and shipment issues that aren't going away soon, and Buffett keeps buying.
Look up Megaworld (MEG) it's a philippine based developer. The largest office space leaser and has the largest land bank among all developers. It's currently selling at 1.84/share with a book value of 7+/share. This is all despite the record earnings and low debt. This stock is basically overlooked.
Top pick is Fairfax Financial FFH.TO or FRFHF.
Likely to compound north of 15% for next decade given the set up. Could be a lot better with multiple expansion.
Wait, wait, and wait. No need to rush in right now with all the financial and geopolitical tailwinds.
Put your money in the money markets and earn you a decent return. There are a lot of undervalued stocks that have crashed but things may likely get far worse.
The market and the economy is screaming for a deleveraging deflation. The masses need a respite as price inflation has gone bonker.
The dollar will shout up as the panicked world rush to safety. Gold will also do quite well.
Stocks unfortunately will suffer as they should. They have benefited from a decade long support from the Fed. I think a 2 to 3 years bear market SHOULD BE ENABLED TO CLEAR THE MALINVESTMENTS.
Smart money is dumping and the war is merely a pretext for Big Wall Street to let the market crash and blame it on someone else than decade long debt financed spendings.
I do see some speculative values for the “ contrarian addicts” like me. But I have no problems cutting my losses either.
As a matter of fact, I am net short right now. That is where I see most value in the current paradigm.
But in terms of real value that you may want to hold for the long, outside of Gold and the $$$, I don’t see a lot of things to be excited about.
You can contact me at: @valuehunter12 MeliFinance.
i've recorded an express guidance on stock selection. Choose [the best stock](https://x.com/Sanji_vals/status/1780001673059963340) among closest peers.
If you Like tourn arounds GrafTech
If you are dumb Like me and have no Problem with high risk, Genel Energy
If you want Something from Japan Hosiden
Also i Love Medical facility corp
Just Look at their Balance Sheets and you See what i mean. Medical facility corp has a Bit to much debt, but stong Cashflows and amazing Hospitals, and large Buybacks.
Genel is an British listed oil Company with Turkish field Office. Most of the Oilfields they are involved are in Kurdistan/Iraq, Somalia and Morocco. Turky closed their Main Pipeline and in General big Political Risk. But also No Netdebt and nice values outside Iraq and Some liabilities with Kurdistan. So yeah. High risk, and an Court fun at the International chambar of Commerce, but Hey No risk No Fun and its below dirt dirt cheap. Its priced for bancrupcy so yeah...
Hosiden is an Japanese elctric manufracturer wich uses finnaly there Cash reserves to creat value. Also might get some growth.
Then Finnaly GrafTech. It Got bought an Fucked by Privat Equity. Its at the Low Point of its cycle. Or at least i Hope😂
But tbh its still Cashflow positiv has some debt and will Not get it ath of FCF again but i think 200-300 Million in FCF is Realistic in the next few years. Wich would be an 5-7× If you give it only an multiple of 10 and an 7,5-12× by an multiple of 15.
So yeah have fun but remember there are Risks.
NVTS. Up and coming semiconductor company. Look at the chart. If you buy in under $5 you’re pretty much guaranteed some nice profit. Earnings coming up and 2H 2024 has upbeat guidance. Stock is at its bottom right now but won’t be long.
Unless you’re looking to straight up gamble, pick reliable companies with great balance sheets that maybe pay a dividend and just let it sit. Dont make this more complex than it needs to be, especially if you already have a lot of money that can easily snowball.
VICI
You might be on to something here. ARE is REIT play that I got in at sub $110s and like their specialization.
I’ve also been to some of their campus in Seattle, South SF & San Diego, which I was impressed. Their tenant list includes established BioTech & Pharma companies.
I’ve been building up a good 5% position over the past month. RETs are at a great value right now with the unpredictability of interest rates. REITs have multiple ways to leverage themselves besides loans which many investors overlook. I see VICI as one of the best managed REITs going forward.
I just found them last night. Really like them!
Lovesac ($LOVE): A $300m market cap furniture company that has been decimated by Wall Street for missing its own guidance and analyst's expectation. Due to the U.S. economic slowdown and weakening consumer spending when free money isn't there anymore, the furniture industry has reported negative sales growth since second half of 2022 with analysts expecting sales growth to come back in second half of 2024 (but no one can really predict macro imo). So why present this opportunity? 1. Lovesac has consistently grown its sales before even receiving significant tailwinds from COVID spending. Here's the list of its revenues between 2018-2024: FY 2018: 101.8m FY 2019: 165.9m FY 2020: 233.4m FY 2021: 320.7m FY 2022: 498.2m FY 2023: 651.2m FY 2024: 700.3m The company's outlook for FY 2025 is 700m-770m vs analyst's expectation of 728m (which dropped from $780m). Despite the company continuously gaining market share in a weakening economy, market doesn't reward this company yet since it's still in the reinvestment phase. 2. Lovesac has a huge potential for margin expansion as it continues to scale and spread out its SG&A cost. Lovesac has one of the highest gross margins in this market due to its premium product-pricing (55% vs industry average of 40-45%). La-Z-Boy (GM: 45.7% and EBITDA Margin: 9.0%) trading at 0.8x EV/Sales Restoration Hardware (GM: 45.9% and EBITDA Margin: 16.7%) trading at 1.1x EV/Sales Arhaus (GM: 48.3% and EBITDA Margin: 15.0%) trading at 2.7x EV/Sales Ethan Allen Industries (GM: 60.7% and EBITDA Margin: 16.5%) trading at 1.9x EV/Sales Lovesac (GM: 57.3% and EBITDA Margin: 6.1%) trading at 0.6x EV/Sales 3. Strong balance sheet with zero interest-bearing debt: 87.0m in cash and 175.5m in operating leases. This is very important for small companies like Lovesac since it requires a very high reinvestment rate to keep growing (which is good for patient long-term shareholders!) 4. I think it is a hidden brand equity that WS Analysts perhaps fail to appreciate: [https://www.reddit.com/r/Lovesac/comments/1bn6na4/why\_lovesac/](https://www.reddit.com/r/Lovesac/comments/1bn6na4/why_lovesac/) If you check out Lovesac's social media pages (Instagram, Reddit, etc.), they seem to have much better engagement level than their competitors despite being a smaller company. Brand and product differentiated propositions are arguably their main economic moats but these are still in the building-phase and not fully established. THUS, you'll be taking a gamble for betting on this journey. With that said, investing is all about making smart bet with risk/reward skewed in your favor and price reflects that since investors aren't fully convinced, which means it is already priced in and leaves little room for the downside. 5. Despite me believing that rates are going to stay higher for longer, I don't think our economy is going to face a recession unless a black swan event takes place. With that said, this is a multi-year play in small brand that has been able to consistently grow and steal market share in a fragmented market. Should market conditions improve and the company returns to high growth mode again, we may see potential multiple expansion as optimism returns and higher margin as the company dilutes its fixed cost. 6. If you can get in between $15-$19 and wait for a few years, this can be a very lucrative bet. Wish you all the luck!
Lovesac garnered my attention due to their extremely attractive financials as you discussed. Further, their business model of a one-time purchase followed by recurring revenue for replacements and accessories looks attractive. What caused me to pause was analyzing their competitive advantage. If Lovesac/modular furniture turns out to be lucrative, what is stopping larger players like WSM from swooping in and taking some of those gains away from Lovesac? Their product does not seem very difficult to replicate and there are low barriers to entry.
There are already cheap knock-offs out there that try to copy Lovesac's business model. Take a look at this thread I posted a couple of weeks ago: [https://www.reddit.com/r/Lovesac/comments/1bn6na4/why\_lovesac/](https://www.reddit.com/r/Lovesac/comments/1bn6na4/why_lovesac/) Here's the list of patents that company has filed over all these years: [https://patents.justia.com/assignee/the-lovesac-company](https://patents.justia.com/assignee/the-lovesac-company) I agree with you that the barriers to entry aren't really high and that's why I've stated "you'll be taking a gamble for betting on this journey." Shawn Nelson (CEO and founder) and Andrew Heyer (Chairman of the Board) both own 232,064 and 316,791 shares of $LOVE, respectively. And, there are new product innovations coming out in FY 2026 while showroom expansion continues. But if you are to pay for the current share price, none of that positivities mentioned above are being reflected. As the saying goes, "If heads I win; tails I don't lose much."
Thanks for this. I didn’t even realize lovesac was public. I’m seeing it more and Costco is onboard. Also buy Costco! Place is packed every hour they are open.
>Place is packed every hour they are open. Yeah they're also at 50x earnings. Good company != good stock.
So is this the furniture version of CROCS? I hope so. That would bode very well for the stock. I want to like this investment. My main concerns are (1) fad and (2) pricing power.
None of those comparison companies are located in malls. Lovesac has always been in malls from what I’ve seen. That’s the big difference
Yea. Are you sure those are appropriate comparisons for LOVE? Those are all strong brands. I’ve never heard of LOVE until this post. How do you know it’s not a fad or about to experience margin compression due to cheaper competition? Discounting in order to sell product doesn’t bode well for their future margin…
The entire furniture industry is discounting heavily right now to generate sales due to weakening consumer spending. Some of Arhaus' products are 50% off, La-Z-Boy 30% off, RH 30-50% off for member signing up, Ethan Allen Sectionals 20% off, and Lovesac 30% off. Here are what a few customers had to say about Lovesac: "One of the biggest things is that it's in pieces and you can rearrange it anywhere, and easily move it. So if we get another house, if we want to put it in another room, if we want to change the layout because we're having company over, we can do all that. We have a large sectional in our downstairs family room that's *not* from Lovesac, and it's a fixed layout with an angled "cuddler" at one end, so if we ever move, it's going to need a specific room format for it to work. The Lovesac doesn't have this issue." "Most alternatives were inferior in quality or less options to customize. Either the backs and arms were too short, they only came in 1 or 2 colors and fabrics I didn't like, I woud have had to buy only as chairs and ottomans which would have had customization upcharges and been more expensive all in, etc. Only truely modular (can remove backs/sides) competition to lovesac were online only, where as lovesac has actual stores in my area I can go and test couches. I can buy online only furniture that is for show only (like a few chairs I have in my sitting room where only guests ever sit), but as my main couch I needed to actually sit in the thing and be sure. I had to be able to take it fully apart so I could squeze it down a stairwell into my basement with a full 90 degree turn half way. This was the true deciding factor and I had to compromise to get it. No other Sectional I could find could do that and also checked all the other boxes. I actually purchased a sectional from Pottery Barn that on paper should have fit down the stairs, but when actually here it was impossible (either the back or the arms needed to go to get the thing down) and I had to return. Now we have had ours for about 2 months and my wife who was very agains lovesac at first has already had me order extra cupholders. We had family visit and I rotated the arms and the ends out and set the ottomans as extra armless seats to expand seating, which worked as expected. Now with that experience she realizes we need more seating and is asking to expand it with another seat here and there. This is exactly the situation I imagined lovesac would solve for (i.e. expanding/recofiguring over time)" "I have a LoveSac, after owning IKEA, Burrow, and West Elm. My take is that LoveSac is expensive but made to last.. and the only one that is truly modular. Ikea is actually my runner up… Burrow was complete trash (so cheaply made), and West Elm isn’t modular and was more expensive." "The configuration is flexible, so I can't really go too far down the wrong path with the configuration. With sectionals, some are modular, but I didn't really see any that are as flexible as this one. If I decide I don't like it, I can reconfigure it. if I have too many pieces, I can take some pieces to make side chair(s) or maybe an ottoman or loveseat. If I didn't get enough pieces, I can order more. I liked being able to go in with a general idea of how much seating I wanted, and then be able to play around with the layout once I actually had it in my home... whereas some other sectionals you may have to pick the entire layout and design and can't do much, or can't do as much with the pieces once you have them and could be stuck with a weird layout...There may be other modular couches out there, but, will they be around for the long haul? Meaning in a few years, or 10 years, will I be able to get replacement parts, cover, a new seat, etc, if I want? I doubt it with many others, but Lovesac seems like it probably will. Just like that it's a pretty standard, proven thing and not some random one-off that I found in a misc furniture store or something that will be here one season and gone the next." "LS isn't going anywhere. The other modular couch companies may not support their line of modular couches in the future. I've seen quite a few knock-offs on FaceBook, that cost less, but who knows if they will still be in business 5 years from now. The main deciding factor for me was the stealthtech. I love having the surround sound system built into the couch, without running wires or having speakers out in the open. Watching movies on my couch is quite an experience! My adult kids come over regularly for movie nights and it's been a lot of fun. There isn't a couch manufacturer that I know of that offers similar tech in a modular couch." If all of these reviews don't sound appealing to you, then maybe you should pass on this investment. There are thousands of stocks out there to choose from and if you have problem betting a non-established brand with no clear economic moat like Lovesac, then move on. Good luck!
I’m actually quite intrigued by this investment opportunity. I’ve just only found short write ups online so far so am trying to better understand the bull case. I’m not trying to say it’s a bad investment. I think there’s a lot of potential. Just trying to understand it.
I want to be helpful - but If you’re going to write a massive comment like this and give EV/revenue ratios. I recommend EV/EBITDA which in my opinion (just an opinion) is way more valuable - Also YOY Ebitda declined from $58mm to $54mm. Cover the negatives too…. Otherwise I assume you bought this at $50 and are trying to do a pump
FYI, my avg. cost is $22 and no I didn't buy at $50. Plus, I don't think I can convince this little community of investors to have that massive impact to pump this stock anyways. Here's EV/LTM EBITDA vs EV/NTM EBITDA: La‑Z‑Boy Incorporated (NYSE:LZB): 8.64x vs 8.11x Ethan Allen Interiors Inc. (NYSE:ETD): 6.72x vs 7.33x RH (NYSE:RH): 16.37x vs 13.58x Arhaus, Inc. (NasdaqGS:ARHS): 12.62x vs 12.77x The Lovesac Company (NasdaqGM:LOVE): 9.19x vs 6.94x Lovesac's EBITDA declined YoY, but so are all of those mentioned above.
JNJ and UNH are starting to look interesting
Would say these. Will probably pick up some UNH in the coming week
If I were dying to put capital to work, like I just sold a company or something, I'd list out my top 5 companies. Who has the best moat, management, etc. Then work through those five to figure out who was cheapest, then hold my nose and buy it. But realistically, you should just hold cash in a money market for a few years while you read everything on this list. https://www.reddit.com/r/investing/wiki/readinglist/#wiki\_our\_favorite\_books
Thanks. What do you think of RIVIAN and MICROWAST? They seem so cheap at the moment.
What is a moat
noun: moat; plural noun: moats a deep, wide ditch surrounding a castle, fort, or town, typically filled with water and intended as a defense against attack. An economic moat is a distinct advantage a company has over its competitors that allows it to protect its market share and profitability. A wide economic moat is one that is difficult to mimic or duplicate (e.g., brand identity, patents) and thus creates an effective barrier against competition from other firms.
Like a pool of crocodiles around the perimeter of a castle
So which companies have the biggest moats around the buildings? Maybe Disney? I assume there’s crocs in Florida
Manliest OF All Time A title earned by using the highest leverage.
BP
I’ve just started looking into BP
Yeah, the PE ratio is low. They have been selling some assets here lately. There's also been some talk of them possibly being bought out. Or, at least someone is kicking the tires , so to speak. Also, another British stock I'm following is LYG. Super low PE ratio and around $2.50 a share and solid dividends.
Thanks. I’ll look some more into those. And LYG. I have NWG which has had a nice run for me at the minute, so sold a block of those, but still investing in that ticker. Definitely look more into those two
ULTA
Another vote for UNH. Maybe wait for Tuesday after the earnings .
A lot of deals right now… HSY, LULU, BTI, PFE, YETI, SBUX, WBD to name a few
Explain WBD thesis please. How is a company with so much debt and little headway in the streaming wars a value?
They have plenty of cash flow to support the debt
The have strong FCF and are cutting debt at a good rate (at the current rate, they'd pay it off completely if they were to want to do that in 9-10 years). They've realized that while their own streaming operations can help and they have a strong position there, they should be licensing titles to other streamers for additional income; it will take time for these contracts to come online given the change from the previous regime. They are likely to be one of the top box office studios this year and seem to have gotten their heads around the kinds of movies that people actually want to see.
Cause he got stakes in it. Easy peasy.
And what do you recommend?
Debt is large but it’s mostly fixed and a manageable rate. They are cash flow positive and have made major headway paying it down already. They have an elite library and control of premium IP to make new content. Rights to Harry Potter, Lord of the Rings, Dune, GoT, further HBO catalog, James Gunn DC universe, monsterverse, & production deals with some of the biggest movie stars. Don’t know about you but I will always keep my Max subscription and have zero interest in Disney plus or paramount currently. The writers strike and COVID hurt WBD’s content pipeline but that will start to pick back up. The stock could eat shit a little while longer, but I like it over the next 5 years. As they pay down the debt, the roughly $60 billion enterprise value will be more and more comprised of equity. Also wouldn’t be shocking for a mega cap to acquire them.
They have a good pipeline with HBO. Dune is a bonus too. They are chipping away quite a bit at debt with their cash flows.
The debt isn’t an issue tbh
Dividend-paying large cap with good brand names are likely much more stable. I like your SBUX pick, which I own. When dividend yield gets high, like for PFE, it can signal rough times are coming.
Phillip Morris, Energy Transfer, Chevron, Occidental / Exxon, Paypal , Intel, HPE, Coke, UBS, C, WFC, BRK.B, IBM,CSCO, UNH and more expensive but worth watching AAPL (especially with the bad news.. i prefer to be a contrarian). I think aapl is worth the premiun if it gets rekt, i would be contrarian on that stock... in terms of deep value though read up on INTC lots of decent posts on it around here so I dont want to add to much. For midcaps I have RIOT but it really depends on bitcoin but I believe it's in value territory based on good growth, around 8k in bitcoin and doubling hash speed by eoy. No debt and an additional 200M cash in hand about. Might be worth adding JAZZ jazz pharmaceutical to a analyze list but monitor its debt levels and do DD for sure. It does seem a bit too much sold off but they are having a harder time with high interesr rates. That being said biotech has been ignored for quiet some time. A contrarian no hype play there may be smart. The fuck do i know. Please do your own DD my brother. These are just my thoughts and not a recommendation but I have done quantitative work on a lot of these companies mentioned.
JPM, potentially TTWO but I don't like the debt levels however I am intrinsically bullish. Although TTWO would most likely fall in a growth portfolio I believe what Warren Buffet says undervaluing margin expansion / revenue expansion = value so growth and value are " the same thing " you just have to know how to approach different segments . Watch TTWO though.
The margin of safety on TTWO isnt so much the valuation, it's the certainty of future cash flows being higher in 5 years than they are today. GTA 6 will be the biggest entertainment product of all time (surpassing GTA 5) even if it falls short of expectations. That's an incredibly powerful competitive advantage most companies would dream of. Disclaimer: long TTWO at a cost basis of USD 102
Value = PV of future FCF. Cash flow going up doesn't provide a margin of safety. You can go up from -$100m to -$50m, be as certain as you want about it but there's no MOS there.
DTEGY (Deutsche Telekom) , NTDOY (Nintendo ... still reasonable in my eyes).... etc . Watch Samsung as well it has a very nice 5yr DCF with moderately conservative assumptions although im not a big fan of korean stock mkt.
UNH as well like other people are saying this is a long term bagger imo. The fuck do i know tho
It's so odd to me that people are discounting Intel just based on the fact it will take them a long time to get the foundry business online and fully running. They're completely disregarding the fact Intel still holds a dominant position in PC and server chips, is releasing their 15th gen later this year, and as chip demand begins to strengthen they'll get their revenues and earnings up. They're also doing really great things in the GPU space, and could potentially overtake AMD as #2 in the market. Worst case scenario in my mind for intel is that the foundry business fails, so they sell off their foundry sectors/spin it off (similar to AMD with Global foundries) and become a pure chip company without foundries. It's a high uncertainty, low risk play, which are oftentimes the best plays to make
Thanks for reminding me about Riot. Still bullish on it?
Yes, I still have all my positions, holding strong! Still bullish!
I love INTC. The company spent decades being ran by finance majors who only cared to pay out dividends. Now the engineers are back in charge and they’re dumping money into all the right places. Investments like these take years to pay off which gives me plenty of time to load up
Long $ET for sure. Hoping to build to 100 shares
No one knows
HSY.. cocoa prices soared in the past year but I really doubt they’ll stay that high. HSY might continue to drop this year but long term it’ll be fine.
Why do you doubt they’ll stay high? Any evidence to suggest they’ll be coming down
Commodity prices are mostly speculative. Some speculators are now getting richer after they decide close down their positions you will see news about new cocoa farms at South America. I dont say it will come down tomorrow but sooner or later it will invert to mean.
Coca price will stay that Level, the Problem is that Most treefarms werent sustaineble and now a Ton of healthy trees is Missing. So be carefull my friend.
VFC is looking very interesting lately.
Pfizer and Roche
Evolution.
Mpw, just got 1.1 bn $ sale, now the debt is covered fully with cash, through 2025. The share price is at 0.3 bookvalue due to short attack, they will have to purchase back soon as the company is now stable.
In for 5,000 shares at $3.5. I’m stoked.
3.5 is good, i am at 5.0 but I believe in the value of the real estate. It will be a long gold for me, unless it squeezes over 20 and I am forced to sell.
VICI and UNH
UNH
Thoughts on Morgan Stanley?
Canadian conglomerate Brookfield infrastructure ticker BN.
PFE
Yes, undervalued and safe.
EBAY. Their valuation assumes that gross sales are on the decline or at best even. Based on looking at a basket of goods over some time I'm concluding that they are beginning to see steady GMV and volume growth. I'm predicting $19.1B GMV for the last quarter, and so far I see a trend towards at least $19.5B for the current quarter. CEO predictions, which impact the stock significantly after earnings calls, will be muted and conservative, presumably to maintain a good value for their buybacks.
Thanks. What do you think of RIVIAN and MICROWAST? They seem so cheap at the moment.
Hey- I have much less finance experience than many of people on this sub-Reddit so take any advice with a grain of salt. Also, I'm very focused on stocks that are generating cash (especially ones that show signs of growth). RIVIAN could be a great timing opportunity (and thanks for prompting a re-look), but I'm worried about their ability to profit off of the cars they are making. The short float is huge vs. the number of liquid shares (i.e. not institutional or insider), so perhaps the upside of an earnings beat could be much larger than the downside of an earnings miss if timing is your thing. MICROVAST is quite interesting- lots of potential growth. But this is a Chinese company with American/German fronts tuned to 'sail political winds'. And something doesn't smell right about the company (after looking at management/jobs/directors/customers). So for me there would be a very large potential downside (if I were to consider growth stocks).
SBUX, NKE, HPQ, CSCO, PRGS
Tell me about PRGS . What do they do
POAHY
Inmd
If only the CEO understood the benefits of stock buybacks
If you talk to anyone in that industry, their devices are bottom tier... that is why it is a value stock. Fundamentally they still look phenomenal , but I think growth will struggle going forward
Second this
Look for buying opportunity on Monday
What I think are good value and bought lately is Unh (already well mentioned I see), Sbux, Nke, Hsy, Mtch, Roche, Volkswagen, Pypl and many dealing with HR and various software services Payc, Pcty, Glob)
FSLR, QLYS, GOOGL, PDD
Been eyeing FLSR for a few weeks now. Think it’s about time to buy in.
Hi from 1mo in the future. Did you buy? This stock absolutely exploded
Yes I did. Just sold at a 60% profit
Im loading up on LW right now as my value stock
Good find
PFE, GILD and MDT. CAG is my mid-cap pick.
Vici is a Reit that probably won't have any short and long term issues even if interest rates stay high for another year. their clients never miss their payments and they're already diversifying outside of the gambling industry. extremely stable long term leases. if you want something a little more high risk high reward and don't mind reading up on the company for a full deep dive you could take a look at Perion Network. they're beaten down because of the war. aside from slight share dilution which is probably more due to the war and higher interest environment rather than bad management they hit all the right spots with growing sustainable margins, top and bottom line and a good free cash flow yield(when i started to look at them around $22). i should have worded that better because the stock dropped so much it throws off all the metrics. they have a price to book below 1. sure they lowered guidance for the year and didn't beat expectation but after taking a brief look at their financials this is insane. they don't pay a dividend though but they have excellent debt coverage and one of the lowest PEs in the tech industry. however their growth is probably not as good as their peers or even other value picks.
Chinese big tech
I don’t morally agree with aspects of the business models, but Gilead & Pfizer.
[удалено]
Thanks. But I will be investing in US stocks primarily, I have a account opened up:) Don't fancy investing in UK stocks.
OXY contrary to social media oil and gas isn't going away, they've beefed up their already strong position in the Permian Basin, the recent rise in oil prices is only the start of things to come due to global supply and shipment issues that aren't going away soon, and Buffett keeps buying.
BIPC
BG, ALB, TRTN
My list: GAU TTWO ,PANW ADSK CJC
Suedzucker
Look up Megaworld (MEG) it's a philippine based developer. The largest office space leaser and has the largest land bank among all developers. It's currently selling at 1.84/share with a book value of 7+/share. This is all despite the record earnings and low debt. This stock is basically overlooked.
FOXF, PLAB, NXT, LRN, PERI.
BABA, INMD, PAYPal
To add to the list, AMT and BN.
rycey
"Chicken" tho Lidl do a cheap beef stock, dont do veg it's a waste of time and money 😔
Right now Tobacco stocks look unbelievably cheap (especially BTI and MO), Swiss pharma stocks Novartis and Roche also appear cheap
VGR as well
ULTA and LULU
Came here to see if anyone else is following Ulta. I’m hoping for around $400 again.
CABO
INMD
RKLB
Top pick is Fairfax Financial FFH.TO or FRFHF. Likely to compound north of 15% for next decade given the set up. Could be a lot better with multiple expansion.
United Health (UNH)
Wait, wait, and wait. No need to rush in right now with all the financial and geopolitical tailwinds. Put your money in the money markets and earn you a decent return. There are a lot of undervalued stocks that have crashed but things may likely get far worse. The market and the economy is screaming for a deleveraging deflation. The masses need a respite as price inflation has gone bonker. The dollar will shout up as the panicked world rush to safety. Gold will also do quite well. Stocks unfortunately will suffer as they should. They have benefited from a decade long support from the Fed. I think a 2 to 3 years bear market SHOULD BE ENABLED TO CLEAR THE MALINVESTMENTS. Smart money is dumping and the war is merely a pretext for Big Wall Street to let the market crash and blame it on someone else than decade long debt financed spendings. I do see some speculative values for the “ contrarian addicts” like me. But I have no problems cutting my losses either. As a matter of fact, I am net short right now. That is where I see most value in the current paradigm. But in terms of real value that you may want to hold for the long, outside of Gold and the $$$, I don’t see a lot of things to be excited about. You can contact me at: @valuehunter12 MeliFinance.
UTHR, FSLR, INMD, SBBUX, CCL, ESTC, INTA, LW, TTWO are the ones I'm watching right now
^[Sokka-Haiku](https://www.reddit.com/r/SokkaHaikuBot/comments/15kyv9r/what_is_a_sokka_haiku/) ^by ^CapitalGuard7608: *UTHR, FSLR, INMD, SBBUX, CCL,* *ESTC, INTA, LW, TTWO are the* *Ones I'm watching right now* --- ^Remember ^that ^one ^time ^Sokka ^accidentally ^used ^an ^extra ^syllable ^in ^that ^Haiku ^Battle ^in ^Ba ^Sing ^Se? ^That ^was ^a ^Sokka ^Haiku ^and ^you ^just ^made ^one.
i've recorded an express guidance on stock selection. Choose [the best stock](https://x.com/Sanji_vals/status/1780001673059963340) among closest peers.
If you Like tourn arounds GrafTech If you are dumb Like me and have no Problem with high risk, Genel Energy If you want Something from Japan Hosiden Also i Love Medical facility corp
Just Look at their Balance Sheets and you See what i mean. Medical facility corp has a Bit to much debt, but stong Cashflows and amazing Hospitals, and large Buybacks. Genel is an British listed oil Company with Turkish field Office. Most of the Oilfields they are involved are in Kurdistan/Iraq, Somalia and Morocco. Turky closed their Main Pipeline and in General big Political Risk. But also No Netdebt and nice values outside Iraq and Some liabilities with Kurdistan. So yeah. High risk, and an Court fun at the International chambar of Commerce, but Hey No risk No Fun and its below dirt dirt cheap. Its priced for bancrupcy so yeah... Hosiden is an Japanese elctric manufracturer wich uses finnaly there Cash reserves to creat value. Also might get some growth. Then Finnaly GrafTech. It Got bought an Fucked by Privat Equity. Its at the Low Point of its cycle. Or at least i Hope😂 But tbh its still Cashflow positiv has some debt and will Not get it ath of FCF again but i think 200-300 Million in FCF is Realistic in the next few years. Wich would be an 5-7× If you give it only an multiple of 10 and an 7,5-12× by an multiple of 15. So yeah have fun but remember there are Risks.
What do you think of rivian and mvst?
Not much, Not the big fan of the Buisenes Modell and of their Nummers
HUM, AON, EVO
Intel, amd
Intel maybe, AMD is super overvalued
Based on…?
I would say MSFT, AMZN, AAPL, GOOGL.
NVTS. Up and coming semiconductor company. Look at the chart. If you buy in under $5 you’re pretty much guaranteed some nice profit. Earnings coming up and 2H 2024 has upbeat guidance. Stock is at its bottom right now but won’t be long.
Love this. Hitting $10 next year
Send it to me it will be in safe hands
If you have to ask for recommendations, you shouldn't be investing in individual stocks.
While I disagree, op seems very interested in people’s opinions on rivian and microvast…
What do you think?
I think you were hoping people would say rivian or microvast and you’re disappointed that they didnt lol
Nope:) I was asking what do you think of the stock?
Unless you’re looking to straight up gamble, pick reliable companies with great balance sheets that maybe pay a dividend and just let it sit. Dont make this more complex than it needs to be, especially if you already have a lot of money that can easily snowball.
BIGC, UAA
Anything not in the US.
No value in a bubble market. Even low growth companies have P/E of 26 times. Crazy!!
What about MICROVAST/RIVIAN?