While going through my market research, I discovered a very promising stock with great potential to return 200 percent within the next two years.
Leslie's Inc (NASDAQ: LESL)
An author of a popular investing and finance book once said that he prefers boring stocks to mainstream popular stock buying because boring stocks move at their own steady pace and are less likely to be volatile.
Leslie's inc fits into that category in this current market, and that's why it tickles my fancy. They sell pool and spa supplies. These pool supplies include Chlorine for disinfecting the pool, pool covers, and thermal pool equipment. They also offer pool equipment repair and maintenance services and market their product through 952 companies nationwide.
Skin in the game
Having massive institutional and insider ownership of shares is a great sign I look out for when buying company shares. It shows that they are committed to the success of the company.
About 61 percent of Leslie's shares are owned by institutions, while insiders own 30 percent. This is great, as this has helped reduce the volatility of Leslie's inc share movement. Notable institutions holding this stock include Vanguard Group, Catterton Management Company, L.L.C., and Blackrock Inc., amongst others.
Competitors
To get the major competitors of Leslie, I placed this company in the Miscellaneous Specialty retailers sector. This produced 36 companies, of which Leslie had a very high ranking. I, however, narrowed their main competitors to 5.
They include:
Dicks Sporting Goods (NYSE: D.K.S.); inc Leslie had a better net margin of 18.26% compared with an 11% net margin of D.K.S.
Ultra Beauty (NASDAQ: ULTA): At a PE of 18, Leslie is considered cheaper than Ultra Beauty
Build-a-Bear Workshop (NYSE: BBW): The debt-to-asset ratio for Build-a-Bear has been increasing for two straight quarters. Not a good thing to consider in this current market state.
Joan inc (NASDAQ: JOAN): Net income for Joan inc has been on the decline for 3 straight quarters.
Bath and Body work inc ( NYSE: BBWI ). This, for me, is a worthy competitor with better EPS than Leslie. However, revenue growth has slowed down for this company for 2 quarters. More research would be done to understand why.
This result clearly shows that Leslie is way ahead of its competitors.
Financials
The third quarter 2022 report was mind-blowing for Leslie inc. (NASDAQ: LESL). There was a 13 percent net sale increase compared with this period last year. Gross profit was also up about 7 percent Y.O.Y.
These net gains have been up for two straight quarters now. I don't see these positive results slowing down soon. In addition, Leslie has a better net margin compared with its competitors. It ranked the first position in this category.
Management
The managerial team is considered experienced, and I trust their decision-making skills.
Michael R. Egeck is the Chief Executive Officer and Director who took on this role in February 2022. He has more than three decades of experience and has taken roles in notable companies, including Hurley International, a Nike, Inc. (from 2011 to 2012).
Others in the team include Mr. Weddell ( Chief Financial Officer and Treasurer),who had worked at Goldman, Sachs & Co. from 2003 to 2015, and Moyo LaBod, Chief Merchandising Officer, who served as Vice President, General Merchandise Manager at Barnes & Noble from 2018 to 2021
I have confidence in this team to lead Leslie (NASDAQ: LESL) to success in the coming years.
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