Angela Aldrich Short Treasury Wine Estates: Sohn New York Conference ~ market folly

Tuesday, May 7, 2019

Angela Aldrich Short Treasury Wine Estates: Sohn New York Conference

We're posting up notes from the Sohn New York Investment Conference.  Next up is Angela Aldrich of Bayberry Capital Partners who presented short Treasury Wine Estates in Australia.


Angela Aldrich's Sohn New York Presentation

•    Treasury Wine Estates (Australia) Short idea - $9 billion market cap. Brands like Bollinger, Penfolds. Stock has gone up 350% past few years

o    Cheap wines have been declining for years
o    TWE is in the middle category which was growing but is now declining. Only high end is growing (which is small)
o    Millennials not drinking wine (drink spirits and smoke pot)
o    Penfolds big in China. E-commerce in China. Lots of counterfeiting. Large inventory in their less desirable brands.
o    TWE channel stuffing in the entire world. Seeing higher sell in and lower sell through in the US
o    They are now selling their popular 19 Crimes wine in 7 Eleven and Costco. Used to be $18. Now selling for $8.99.
o    In house distribution not going well
o    Looking for 50% downside at a generous 19 times forward earnings
o    Business is not growing. No reason for 30 times forward earnings. Compelling short


Be sure to check out the rest of the Sohn New York conference presentations.


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