Boot Barn Holdings, Inc. (NYSE:BOOT) is one of my best investments in recent memory. Back when I invested in the company in December of 2018, the stock was trading in the mid-teens and I'm now sitting on a healthy triple-digit gain. It has to be noted here that Boot Barn stock has performed much better than I expected back then, and I even wrote a follow-up piece warning investors to hold off any new investments as the stock, in my opinion, was trading in fair value territory early last year. While my second article did not age well (because the stock is up a further 51% since then), I cannot complain about the nice return I'm sitting on. Using revised earnings estimates to reflect the improving macroeconomic outlook, I find Boot Barn attractively priced.
The vaccine boost
Investors rushed to snap up retail stocks on Nov. 9 as Pfizer Inc. (PFE) announced a 90% efficacy rate in the first interim efficacy analysis of its Covid-19 vaccine candidate BNT162b2. Boot Barn stock popped 18% as investors dumped internet retail names in favor of companies with a strong physical presence that are expected to benefit as the world slowly but surely begins to get back to where things were before Covid-19. On Nov. 16, Moderna, Inc. (MRNA) reported promising data from its vaccine candidate as well, and normalcy seems ever so close with these breakthrough developments.
Boot Barn, as a retailer with a strong physical presence, will reap the rewards if consumers get back on the streets, which is only a matter of time.
The interesting correlation with oil prices
For the fiscal year ended Mar. 28, 2020, Boot Barn derived 30% of its revenue from the Work and Other segment, which is dominated by the sales of rugged footwear and work pants that are primarily
