ASX:UNI
Universal Store Holdings Ltd
Investment Summary
The fund managers believe that Universal Store Holdings Ltd presents a compelling investment opportunity, particularly as it is a leading youth apparel retailer benefiting from a recent 19.2% share price increase following strong financial results. In their opinion, while caution remains regarding the overall consumer discretionary sector, Universal is better positioned than its peers due to its strong management and national rollout strategy. Moreover, they note that Universal's shares were trading at a significant discount to competitors, with a P/E ratio of sub-10x and a notably higher forecast earnings growth. The company's recent performance, showcasing improving sales and efficient cost management, has led to earnings upgrades and a fairer valuation around the post-IPO average P/E of 13x. This combination of factors has resulted in an investment return of over 40% since January, highlighting its appeal.
Commentary From The Managers
Milford Asset Management
31 Aug 2024
$7.00
- Milford Asset Management continues to hold Universal Store Holdings Ltd due to its strong management.
- The company's strong result has led to solid margin upgrades to consensus.
- Despite caution on the consumer discretionary category, Universal Store is viewed as relatively better placed.
- The company is in an early stage national rollout.
- Universal Store's peers are currently faltering, which positions it advantageously.
- The stock is trading at a valuation discount compared to competitors.
Blackwattle Investment Partners
30 Apr 2024
$5.77
- Blackwattle Investment Partners continues to hold Universal Store Holdings Ltd as a core investment.
- Universal Store is a leading youth apparel retailer, integral to the fund's strategy since its inception.
- As of CY23, shares were trading at a significant discount to retail peers, at a sub-10x P/E ratio.
- The company has materially higher forecast earnings growth compared to competitors.
- A solid first-half result in February demonstrated improving like-for-like sales and excellent cost control.
- The catalyst for consensus earnings upgrades was the clean inventory position of the company.
- Universal Store's investment has returned over 40% since the end of January, including dividends.
- It is currently trading at a more reasonable valuation, in line with the post-IPO average P/E of 13x.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.