GNC

GNC Holdings Inc

Consumer, Event Driven/Special Sit


Presented:06/24/2015
Price:$45.25
Cap:N/A
Current Price:$0.06
Cap:$0.01B

Presented

Date06/24/2015
Price$45.25
Market CapN/A
Ent Value$5.09B
P/E Ratio16.3x
Book Value$8.49
Div Yield1.59%
Shares O/S86.60M
Ave Daily Vol1,120,000
Short Int4.12%

Current

Price$0.06
Market Cap$0.01B
GNC Holdings, Inc. operates as a specialty retailer of health and wellness products. The company operates through three segments: Retail, Franchise, and Manufacturing/Wholesale. Its products include vitamins, minerals and herbal supplements, sports nutrition products, diet products, and other wellness products. The company sells its products under GNC proprietary brands, including Mega Men, Ultra Mega, Total Lean, Pro Performance, Pro Performance AMP, Beyond Raw, GNC Puredge, GNC GenetixHD, and Herbal Plus, as well as under third-party brands. It operates a network of approximately 8,900 locations worldwide. The company sells its products through company-owned stores; online through GNC.com, LuckyVitamin.com, drugstore.com, and DiscountSupplements.co.uk; domestic and international franchise activities; third-party contract manufacturing; and e-commerce and corporate partnerships. GNC Holdings, Inc. was founded in 1935 and is headquartered in Pittsburgh, Pennsylvania.

Publicly traded companies mentioned herein: GNC Holdings Inc (GNC), Target Corporation (TGT), Vitamin Shoppe Inc (VSI), Wal-Mart Stores Inc (WMT)

Highlights

At $45 per share, GNC Holdings’ stock (GNC) is reasonably valued (14x ~$3 of expected EPS in F2017). However, the presenter is long the stock as management is presently reviewing the corporate structure, and he sees the potential for GNC to alter its course and pursue a more efficient, profitable franchise-focused model. Additionally, downside risk appears to be manageable. In a worst case scenario he thinks the multiple could compress to 12x - 13x, which equates to just 15% - 20% risk. With his base case earnings estimates higher than the Street's, he is comfortable buying ahead of management announcing its game plan.

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Idea Discussion

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