24 July, 2018
1. We add LONG Williams-Sonoma Inc $WSM to our trade ideas
Company Overview
Williams-Sonoma, Inc.consumer retail company that sells kitchenwares and home furnishings under Williams-Sonoma, West Elm, pottery Barn, Pottery Barn Kids, PBteen, Rejuvenation and Mark and Graham brands. It is headquartered in San Francisco, California, United States and is one of the largest e-commerce retailers in the US and one of the biggest multi-channel specialty retailers in the world.
Valuation
Based 2018 consensus earnings expectations, as per Bloomberg, the stock trades at 14.3x price-to-earnings. Relative to the forward price-to-earnings multiple of its peer group, the company trades at approximately a 10% discount.
For fiscal year 2018, the company generated 18.4% return on invested capital, which puts the company in the best-in-class category for its peers group by a significant margin.
2. We close out LONG iShares MSCI Saudi Arabia ETF $KSA. The trade idea was initiated on 9 Oct, 2017 and as of yesterday’s close generated a total return of 25.09% in USD terms. During the same period of time the S&P 500 and MSCI ACWI indices have generated total returns of 11.94% and 7.21%, respectively.
We remain bullish one the Saudi Arabian equity market especially given the market’s recent inclusion into the MSCI and FTSE emerging market indices. We are tactically exiting the position, should the market have a meaningful correction we would look to re-enter the trade.
Trade Ideas should not be considered as investment advice or a recommendation to purchase any particular security, strategy or investment product. References to specific securities and issuers are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.