UTZ - Utz Brands: Enough Reasons To Be Salty (Rating Downgrade)
2024-04-15 05:20:39 ET
Summary
- I personally sold Utz Brands, Inc. due to an increase in share price and unfavorable fundamentals.
- UTZ is showing disappointing top-line growth, poor profitability metrics, and high debt levels, which makes it hard to become a profitable business.
- Based on discounted cash flow analysis, shares are currently overvalued.
- At the current share price, it would be wise to stay on the sidelines until the share price is much lower or until the company's fundamentals have improved significantly.
Investment thesis
On the 24th of August, I wrote an article about Utz Brands, Inc. ( UTZ ) and I stated that the risk/reward was unattractive. Since then, the share price has risen significantly. However, I personally think that the fundamentals of UTZ have not necessarily improved.
Despite the fact that UTZ is a very small position in my portfolio (approximately 1%) I thought it was a good moment to sell. I really love the buy and hold strategy, but I don't see any potential in the company at the moment, especially not at these price levels....
Utz Brands: Enough Reasons To Be Salty (Rating Downgrade)