Hi,
**The Core Idea**
All three of these companies (Planet Fitness, Broadcom and Insulet) are fundamentally sound companies caught in a company specific storm. They got strong earnings growth, healthy margins, and clean balance sheets. The reason for the sell of is valid but in all cases the punishment seems disproportionate to the actual damage done.
$PLNT down 55% from ATH due to a failure in their marketing as admitted by their management during the earnings call. Essentially, they alienated their core audience and drifted away from their core message. As a result, new sign-ups slowed and management paused their price hike. This being said the core franchise model still works, royalty streams are stable and management are actively course correcting. However, I do see a major risk related to the macro economy and decreasing disposable income for the core demographic, however, I'm optimistic it will normalise in the long run.
$AVGO is down 22% from it's ATH because management held their revenue target (still exceptionally good). Also a miss in the software segment (the higher margin segment) resulting in margin compression (slight decrease). This being said the 22% drop is entirely to do with the fact that the company hasn't hit the exceptionally high standards of speculators. Outside of that they got contracts with all the major AI companies and is on track to grow significantly. My biggest concern with this stock is that it's benefiting significantly from the AI boom which could potentially go bust but again I am optimistic about the AI sector and it's adoption.
$PODD is down dover 50% YTD. This stock in my opinion is the riskiest because it hedges on the hope that management is able to control the defects of their devices which caused the sell off in the first place. Additionally, the overall market has been adversely affected by the rise of GLP-1s. Despite the defects, adverse incidents and rise of GLP-1s this company has posted higher revenue and management stated there was a increase in new patient starts in March, signalling trust and demand.
I am considering $PGY on a similar analysis.
Please share your thoughts on my thesis, I know it's quite contrarian, that's the style I prefer to invest but I am aware I could be wrong so your insight is valued.
Also share any other tickers with a similar set up! Would love to research them.