HELE - Helen Of Troy: Solid Business With A Depressed Valuation
2024-03-30 09:25:28 ET
Summary
- HELE’s growth has been mild (CAGR: +4%) but fairly consistent, reflecting its quality brand portfolio and opportunistic M&A. We would like to see more of the latter.
- HELE’s margins are impressive and translate well to FCF, albeit is reliant on the company maintaining its competitive advantage.
- Current economic conditions represent near-term headwinds, with demand declining for discretionary products.
- HELE is outperforming its peers, with better growth and margins. Despite this, HELE is only trading at a small premium, suggesting upside.
- HELE’s valuation suggests upside in our view, justifying a buy rating despite the headwinds and growth risks.
Introduction and thesis
Helen of Troy Limited ( HELE ) is a global consumer products company headquartered in Hamilton, Bermuda. The company operates through three main segments: Housewares, Health & Home, and Beauty. Helen of Troy designs, develops, and markets a diverse portfolio of consumer products under various brand names, serving both domestic and international markets.
HELE is a fundamentally strong business, owing to incremental operational improvements by Management in conjunction with gradual commercial development. The company operates a range of leading brands, within which it has progressively created and innovated. Further, it has acquired a range of businesses and brands to supplement its portfolio....
Helen Of Troy: Solid Business With A Depressed Valuation