SBH - Sally Beauty: 3 Reasons To Buy This Small-Cap Discretionary Stock

2024-07-15 22:21:17 ET

Summary

• Sally Beauty Holdings is a small-cap stock providing beauty products globally to DIY customers and professional stylists/salons.
• H2-24 could be better than H1 on the topline front, and beyond that, the company could generate double-digit bottom-line growth over a two-year time frame.
• SBH's FCF yield is already above average at nearly 14x, but this looks set to increase as FCF prospects pick up in H2.
• We also like the risk-reward on the charts.

Introduction

Sally Beauty Holdings ( SBH ) is a small-cap stock, noted for providing beauty products across the globe to both DIY customers as well as professional stylists/salons (in North America, they serve as the largest distributors of professional hair color and care); the bulk of these beauty products include hair color and hair care-related products, with both categories accounting for well over 80% of group sales (besides hair-related material, SBH also provides styling tools and nail products)....

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