HMRZF - Hennes & Mauritz - Why Despite The Forecasted Growth I'm Tepid

2024-03-10 08:02:54 ET

Summary

• H&M has been struggling with declining fundamentals and has a complicated ownership structure.
• Long-term management is preparing the company for eventual privatization at a likely-unappealing price.
• Despite the potential upside, H&M is better off as a bargain bin investment due to its performance and conservative upside.

Dear readers/followers,

It's been quite some time, almost a year's time in fact, since I wrote about Hennes & Mauritz, or H & M ( OTCPK:HNNMY ) ( OTCPK:HMRZF ). This company has been struggling with declining fundamentals for years, and its complicated ownership structure makes it incompatible with long-term ownership, at least as I see it. The fact that the long-term management seems to be preparing the company for eventual privatization at a likely unappealing price does not make it easier to swallow, despite what could be an upside. At times, if you had timed things correctly, you could have made a decent ROR on this investment, but I still say that this company is better off in your "bargain bin", thanks to RORs like this.

I myself sold nicely attractive short-dated puts which put me in a positive RoR without having to take too much risk with a business such as this....

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