TPX

Tempur Sealy International Inc

Consumer


Presented:04/11/2016
Price:$58.28
Cap:$3.63B
Current Price:$50.47
Cap:$8.76B

Presented

Date04/11/2016
Price$58.28
Market Cap$3.63B
Ent Value$5.70B
P/E Ratio49.39x
Book Value$4.65
Div Yield0%
Shares O/S62.30M
Ave Daily Vol1,433,084
Short Int13.01%

Current

Price$50.47
Market Cap$8.76B
Tempur Sealy International, Inc. develops, manufactures and markets mattresses, foundations, pillows and other products. The company's brand portfolio includes many of the recognized brands in the industry, including Tempur, Tempur-Pedic, Sealy, Sealy Posturepedic, Optimum and Stearns & Foster. The company operates in three business segments: Tempur North America, Tempur International and Sealy. The Tempur North America segment consists of two U.S. manufacturing facilities in Virginia and New Mexico and Tempur North America distribution subsidiaries. The Tempur International segment consists of manufacturing facility in Denmark, whose customers include all of distribution subsidiaries and third party distributors outside Tempur North America and Sealy segments. The Sealy segment consists of company-owned and operated bedding and component manufacturing facilities located around the world, along with distribution subsidiaries, joint ventures, and licensees. Tempur Sealy International was founded by Robert B. Trussell, Jr. in 1992 and is headquartered in Lexington, KY.

Publicly traded companies mentioned herein: Mattress Firm Holding Corp (MFRM), Select Comfort Corp (SCSS), Tempur Sealy International Inc (TPX)

Highlights

The presenter is short shares of Tempur Sealy (TPX), citing meaningful disruption from startups in the space, macro headwinds, along with stagnant product innovation to combat these pressures. The presenter is expecting some level of revenue contraction over the coming years from these disruptions, and he feels that by shorting TPX at the current $60 price you are “getting paid to wait.” By the presenter’s model, there’s 15% - 20% downside in the short-term from secular headwinds; in addition, he believes once long-term macroeconomic headwinds come into play, TPX shares could trade down ~30% to ~$40 over the next 18 - 24 months.

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Idea Discussion

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