The first five companies I saw at the ICR conference in Orlando; Meeting a tennis legend
1) Greetings from Orlando, Florida!
I'm here attending the annual ICR conference. At the event, nearly 200 public retail, restaurant, and consumer companies meet with analysts and investors over two days.
Every half hour from 8 a.m. to 4 p.m., three to five companies present or do "fireside chats" (Q&A sessions with an analyst) in one of the ballrooms and, separately, do small-group breakout sessions.
I like the ICR conference because I find it to be a very efficient way to see a lot of companies, get up to speed on ones I know, and hear the pitches for ones I don't.
It's always fun – and instructive – to look back at what I wrote about the companies I saw in past years. I missed last year's conference because I was running for mayor of New York City, so let's take a look at the five companies I wrote about in my e-mails on January 9 and January 10, 2024:
- Of shoemaker Crocs (CROX), I concluded: "The stock looks like it has more room to run."
- Of Boot Barn (BOOT), the largest western and work-wear retailer in the U.S., I wrote: "Yesterday's announcement smelled like a bottom."
- Of another shoemaker, Wolverine World Wide (WWW) – which owns Merrell, Saucony, and a few other shoe brands – I wrote that its "pre-announcement and stock rally [on January 8, 2024] smells like a bottom."
- Of struggling retailer The Container Store, I warned: "It's hard to see how management can turn this around. At the end of the day, I just don't think there's a reason for this business to exist..."
- Lastly, I said that fast-food chain Denny's (DENN) wasn't a buy: "I love franchise businesses... But if I'm going to pay 20 times earnings, I need to believe there's going to be growth – both in units and same-store sales."
As you can see in the chart below, I nailed four of the five...
Since January 9, 2024, BOOT is up 179% and WWW is up 110% versus a 47% gain for the S&P 500 Index... while DENN is down 41% and The Container Store went bankrupt. The only one I got wrong is CROX, which is down 13%.
2) Here are quick thoughts on the first five companies I saw yesterday (in the order that I saw them)...
Used clothing retailer Savers Value Village (SVV)
At first glance (I had never heard of the company), I don't like the declining profitability:
And at about 18.9 times this year's earnings estimates, the stock isn't cheap. SVV is an easy pass.
Burger chain Shake Shack (SHAK)
I love the company's food, and the business has been a strong growth story:
But there are a lot of gourmet burger chains out there. And at roughly 62 times this year's earnings estimates, the valuation is absurd. SHAK is another pass.
Doughnut maker Krispy Kreme (DNUT)
I was short this stock long ago when its ticker was KKD, before it was taken private in 2016. The company went public again in 2021, and its stock has been a disaster (again):
This isn't surprising, given that the financials are in freefall (note that I use operating income in this chart instead of net income, because of a large noncash goodwill impairment charge last year):
The declining financials and a lot of debt – $1.4 billion on a market cap of only about $750 million – make DNUT another easy pass.
Furniture retailer Haverty Furniture Companies (HVT)
This roughly 140-year-old company is very well run. But it's in a terrible industry characterized by ferocious competition. That's why revenues and profits are roughly flat over the past two decades:
The stock trades at around a modest 12.3 times this year's earnings estimates – but deservedly so. The stock's roughly 5% dividend yield is money good, but that's not sufficient reason to own it.
Discount retailer Five Below (FIVE)
I nailed this one – writing on April 4 last year that it's "still a good company, and its stock would be a huge beneficiary if [President Donald Trump] eased the tariffs." Since then, FIVE is up 259%.
It's a very well-run company and has been an extraordinary growth story:
The stock was a screaming buy in April, but now that it's back to trading at about 31.3 times forward earnings estimates, it's fully valued.
In summary, I didn't see anything I got excited about yesterday morning – on either the long or short side.
But that doesn't discourage me...
To be a successful investor, you have to learn about and follow lots of companies so that you're prepared to act when the market makes a mistake – as, for example, it did with FIVE last April.
I'll continue tomorrow and the rest of this week with notes on other companies I saw yesterday and am seeing today... so stay tuned!
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.
P.P.S. Continuing my series on my recent trip to South Africa with my parents...
After two days in the Drakensberg mountains, we drove three hours back to Durban and had scones with jam and cream with South African tennis legend Kevin Curren! Here's a picture of us with him:
The pinnacle of Curren's career was beating Stefan Edberg, Jimmy Connors, and John McEnroe in straight sets to reach the 1985 Wimbledon final – and then losing in four sets to unseeded 17-year-old Boris Becker, who became (and still is) the youngest men's winner ever.
Also in Durban, my parents and I spent an hour at the Durban Botanic Gardens and flew to Cape Town for New Year's Eve. Here's a picture of us:
