Bnny - Annie's food stock pitch help

Hi all,
Anyone have any thoughts on Annie's? I have a stock pitch coming up soon at a big fund on this stock. Any tips on valuation, or how to make a good half hour stock pitch? Appreciate any help, I really want this one.

 
Best Response

Read the VIC pitch (don't make it too obvious if you do in fact pull things from this).

Make sure to take a stance (buy/short/do nothing) - some people will talk about a stock but will be afraid to make a recommendation. Talk about the risks in the investment. When I pitched to a fund I recommended shorting a company that supported the dividend through capital raises. A risk there is that the capital raises could perpetuate for quite some time. There's risk in every investment - make sure you know that risk and talk about it. It shows you think about risk/reward and not just the reward. Investing's about putting the odds in your favor and investing in situations where there's asymmetries in the risk/reward scenario.

I have a suspicion that the fund has a strong view on the stock they asked you to look at, which is why you need to come prepared. Read the prospectus, 10-K, 10-Q, etc. Try to do that for competitors if you have the time. If you can only read one, read the prospectus, IMO.

Look at valuation (EV/EBIT, EV/EBITDA, etc.). Do you know how to calculate these? If you don't I'll try to get back to you and do it for you.

Also, since this is a recent IPO (recent meaning this year), talk about how IPOs are inherently not in your favor. You have the most knowledgeable sellers selling their stake to you - it's hard to develop an edge there, and this leads to overvaluation due to the incentives in place (IBs earning their fees by placing a high valuation on the company, management/early investors cashing out, etc.).

Good luck!

 

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