Danny Ocean
5.9K posts
@DannyOcean555
Generalist looking for a new seat | FCF per share | Slowly slipping down the quality spectrum
Jana Partners is done waiting for $FUN turnaround. Activist is officially demanding a board overhaul and an immediate sale process. As a reminder, Jana was part of the group that pushed for a turnaround at the end of last year. This must be a FUN ride.
HAYW POOL comes out w/ weak numbers & guide, cited lowest pool starts in a decade w/ a poor outlook, discretionary has yet to inflect +ve Fine: HAYW is ~75% aftermarket (R&R), so less exposed to new builds & *theoretically* has an upcoming R&R wave as COVID era builds age PNR reports & also gives a dim resi outlook: guiding 3% pool sales growth entirely from price (flat equipment volumes) & claiming this mostly inflationary pass thru (which is hitting a limit). Bonus that it’s all H2 for any possible upside. HAYW’s soft guided & estimates reflect “MSD” pricing in ‘26 (effectively 5%, so 200 bps > PNR), with maybe even some +ve volume AFAIK, share amongst the OEMs is reasonably stable (with FDR talking up their alleged gains the most)- So, given the above, what if HAYW comes in closer to PNR? 3% topline, slight GM compression (multi yr expansion was largely px driven), flat SG&A % >> lower margins, flat EBITDA $ (& lower conversion as capex was partially pushed from ‘25 to ‘26) What’s a business like that worth? 11x EBITDA/~20x FCF is >20% downside
ULCC 1. Even the lowest fare providers are starting to cater to the higher* end cohorts *Everything’s relative 2. O’Leary’s comment re the seats is extra funny considering Frontier’s current CEO (& co-architect of the “Euro biz class”) worked at Ryanair for over a decade
