Valens Equity Weekly Insights - 2022 06 28
Fox Factory (FOXF) has a high-quality brand and growth opportunities into relatedmarkets. Uniform Accounting shows the value of the company's brand, and it shows
that the market isn't pricing that sustainably. That makes Fox Factory a compelling
buy.
Fox Factory has historically been a high-quality branded business, with Uniform ROA
consistently above 28% since going public in 2013. The company has since grown into
related markets that significantly open up its market reach while maintaining its strong
brand value.
Fox Factory's management is aligned to focus on growth, specifically profitable growth.
EBITDA growth, ROIC, and FCF metrics should help management focus on growth
without potentially overleveraging the balance sheet or buying low-quality assets.
Cracker Barrel (CBRL) is being removed from the Conviction Long List. The company is
struggling with wage inflation and rising oil prices, so we are closing down 36%.
FOXF
Fox Factory Holding is a holding company. Through its subsidiaries, the company is a designer, manufacturer and marketer of products and systems used on bicycles, side-by-side vehicles, on-road vehicles with and without off-road capabilities, off-road vehicles and trucks, all-terrain vehicles, snowmobiles, specialty vehicles and applications, motorcycles, and commercial trucks. In its powered vehicle product categories, the company provides products under the FOX, BDS Suspension, Zone Offroad, JKS Manufacturing, RT Pro UTV, 4x4 Posi-Lok, and Tuscany brands. The company's bike product offerings are used on a range of mountain bikes and road bikes under the FOX, Race Face, Easton Cycling and Marzocchi brands.
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