10/10/24 - $etsy - Probs a buy ~$50, small 1%

10 Okt

10/10/24 :: VROCKSTAR :: ETSY
Probs a buy ~$50, small 1%

- 700 fcf on 7 bn enterprise value = 10% yield
- but really call it 300 of that is stock comp (and stonk down), so perhaps you're at 6-7% "true" yield
- #s depressed and it's not growing all that fast - which is why it's been something i've stayed away for (growth is the scarcity... hence CELH, NXT, NVDA and other meme stuff)
- but at this pt $50 seems like a pretty good smaller size entry for a 1% punt
- don't love the fact they have 2bn debt and 1bn cash
- but think the platform isn't going anywhere. still growing.
- anyone have a more nuanced view? i'm not wed to the idea, but a small position here will force me to do more work.

V

15 Okt

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while i don't "love" trading on GS recommends (today "sell" tgt $45) i tend to think these channel checks and bottoms up work are probably reflective of what the stock is already showing and truth be told, stock will require some proof points before it can go sustainably higher. while position was small i just removed it with a tiny L in order to reallocate capital elsewhere. what's my next target? sub $40, though i set the "trigger"/ alarm slightly above this. given the co's net debt if you adj. say a $40 stock by 15% and use 2.67 EPS as correct (which in fact is the question at heart), you'd get 18x PE - still not cheap if that # is not right. given consumer stuff that's actually growing e.g. LULU as one example that's a great brand, has good int'l legs and arguably competes "less" vs. the cheap chinese stuff/ amzn fakes is still hard enough to buy near 18x, the right ETSY multiple might be closer to 15x on a 2.5 figure which puts the stock at closer to mid 30s (when again adjusting for net debt). the point is - it's in a tough no man's land here. could it go higher and rebound? sure. but that's just a distraction to me b/c i'd probably want to cut it. and i'm avoiding the situation where we're at 40 and i'm wondering "what to do". id rather consider buying back vs. "adding" to a stock down 15-20% and a small one at that. avoid the distractions. act quick. take small L's. that's fine. and nobody knows. all in stride. see you if/when lower for a new comment.
be safe, have a good day

V