Johnson Outdoors: Oversold On Supply Chain Concerns - Buy

Nov. 28, 2022 7:30 AM ETJohnson Outdoors Inc. (JOUT)5 Comments
Intrinsic Analysis profile picture
Intrinsic Analysis
268 Followers

Summary

  • Johnson Outdoors is a long-standing outdoor recreational equipment manufacturing business, primarily focused on the North American market, with a solid range of brands and products.
  • The company was a Covid Winner, but operational performance struggled in FY22 due to ongoing supply chain challenges.
  • With a strong balance sheet, the stock is trading on undemanding valuation metrics; at ~$55 per share, Johnson Outdoors is a BUY.

Two female friends sitting next to campfire in a wild camp in the mountain.

ArtistGNDphotography/E+ via Getty Images

Hunting For Covid Boom-&-Bust Opportunities

Early on in the pandemic, it became clear that there would be many companies (Covid Winners) that would be gifted major boosts to revenue streams; in some cases this also translated through to profit booms. The

JOUT Overview

Source: JOUT IR website, Investor Presentation, slide 7.

JOUT Sales Mix

Source: Created by author using data from JOUT quarterly reports.

JOUT Sales Growth

Source: Created by author using data from JOUT quarterly reports.

JOUT Margin Decline

Source: Created by author using data from JOUT quarterly reports.

JOUT Inventory Expansion

Source: Created by author using data from JOUT quarterly reports.

JOUT Normalized Earnings

Source: Created by author using data from JOUT quarterly reports.

JOUT EBIT Multiple

Source: Created by author using data from JOUT quarterly reports.

This article was written by

Intrinsic Analysis profile picture
268 Followers
15 years of professional experience in equity markets and investment consulting to institutional clients, including over a decade as an equity research analyst with a leading fund manager.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This writing is for informational purposes only. All opinions expressed herein are not investment recommendations, and are not meant to be relied upon in investment decisions. The author is not acting in an investment advisor capacity and is not a registered investment advisor. The author recommends investors consult a qualified investment advisor before making any trade. This article is not an investment research report, but an opinion written at a point in time. The author's opinions expressed herein address only a small cross-section of data related to an investment in securities mentioned. Any analysis presented is based on incomplete information, and is limited in scope and accuracy. The information and data in this article are obtained from sources believed to be reliable, but their accuracy and completeness are not guaranteed. Any and all opinions, estimates, and conclusions are based on the author's best judgment at the time of publication, and are subject to change without notice. Past performance is no guarantee of future returns.

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