Q: Hi Guys
i noticed you topped up Aritzia to 4.5% in your Jun update, the stock is down about 10% the last week or so, not sure i understand your strategy here. If a hard landing does come, which is quite possible, EPS could get crushed in this fashion retailer, i bet at some point its down another 30%, like many of the other stocks, take GOOS as another example.
Again it seems to me that 30-40 % draw downs from purchase price recommendations are no big deal.
Thanks ! Gordie
i noticed you topped up Aritzia to 4.5% in your Jun update, the stock is down about 10% the last week or so, not sure i understand your strategy here. If a hard landing does come, which is quite possible, EPS could get crushed in this fashion retailer, i bet at some point its down another 30%, like many of the other stocks, take GOOS as another example.
Again it seems to me that 30-40 % draw downs from purchase price recommendations are no big deal.
Thanks ! Gordie
5i Research Answer:
It is easy to be a Monday morning quarterback, and of course hindsight is always perfect 20/20. ATZ has grown quickly and we were of the view that sentiment and valuation were too low for its growth prospects. Obviously we were not correct. A big stock decline also confirms that the news was a surprise to the street as well.