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TableTopic/WriteUp: Gildan Activewear/None

Introduction: every week, I will commit to finding one potentially actionable idea which will be briefly mentioned in my Table Topic posts. The posts will be published every Sunday night at 6 PM EST. I’m not aiming for perfection but simply consistency in a research process that I seek to further develop. The goal here is to pick up and discard undesirable ideas as fast as I can, all while attempting to land on one that may pay dividend. In terms of idea sourcing, I’m agnostic to the source. I find that my job is to identify points of contention and research the idea such as to hold an opinion that sways me to either side of the debate. Table Topic ideas are meant to be very high-level and shallow at first; they’re merely sticky-notes of initial thoughts I have as I shuffle through pages of writings I find interesting. The subsequent write-ups, however, will be a bit more detailed. Table Topic: Gildan Activewear (idea source: Value Investing Club) Eye-catcher: ~10x NTM EV/EBIT for a co...
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Nelnet (NYSE: NNI)

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Company: Nelnet Market Cap: 2.87B P/E: 8.2x (LTM) / 11.3x (NTM) Share Price: ~$74 Tangible Book/Share: $63 Brief History: Nelnet is a company formed in Nebraska in 1978 to service federal student loans for two local banks. Since then, the company quickly grew to become a leading originator and servicer of student loans, primarily of those that originated under the Federal Family Education Loan Program (FFELP). Starting in 1965, FFELP was a system under which loans originated by banks and other private lenders were guaranteed by the US federal government. However, the Reconciliation Act of 2010 discontinued the creation of new loans by private lenders and shifted all future originations to the Department of Education (DOE) under the Direct Loan program, effective July 2010. This meant that Nelnet’s legacy business of originating FFELP loans came under threat. Since then, the company's survival mechanism has been to acquire portfolios of FFELP loans (~$28billion to date) from various...
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BJ's Wholesale Club

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Background Among the beneficiaries of state-wide lockdowns due to COVID-19 and sudden surge in grocery demand is BJ’s warehouse club who reported a record 27% in merchandise comparable sales for Q1 2020. Since 2018, the company has continuously communicated to investors its strategic plan for long-term growth consisting of, among other things, better in-house assortment of merchandise and stronger focus on acquiring members in its high tier program (BJ’s Reward and co-branded Mastercard). Following strong 1Q 20 earnings, the market has begun pricing in what is shaping out to be a favorable outlook for the company; currently offering a 17% buying opportunity. Thesis The company’s fundamentals have been strengthening quarter to quarter with strong tail winds shaping a long-term runway for growth. BJ’s has made incremental progress over the past few years, among which are scaling their digital capabilities (engaging more members in buy-online-pick-up-in-club or BOPIC activities) that tend...
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TJX - A Dominant Off-Price Retailer

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Background In the advent of the COVID-19 pandemic that practically forced the global economy to a halt, a significant number of American citizens have lost their jobs or have been furloughed and many businesses have struggled to stay afloat following the significant drop in demand. As of May 6th, 2020, an estimated 23,000 (both public and non-public) filed bankruptcy cases were reported by U.S courts (1). In the retail industry alone, bankruptcies included popular brands such as J.C. Penney, Aldo, and J. Crew. As industry experts try to grapple with the effects of sudden drops in both supply and demand, it’s evident that there still lies great uncertainties ahead. As businesses await for a resurgence in demand, I believe some companies will be better positioned to come out of this crisis. An example of such an opportunity lies in the retail space, where some off-retail price companies will be better positioned (relative to their full-price retail peers) to return to profitability despi...
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