Vistry Group plc
Thesis
Vistry is transitioning to a pure-play Partnerships business, which is faster-growing, less-cyclical, and earns higher returns on capital than traditional housebuilding. The company is currently undervalued, trading at less than 4x medium-term EBIT, with a potential upside to £50/share or more as it executes its strategy and benefits from a structural housing shortage in the UK.
Did it work?
The long thesis for Vistry was based on a transition to a higher-growth, less-cyclical business model and an undervaluation relative to its earnings potential. However, the stock has declined by 72.4% since the pitch, indicating that the anticipated growth and valuation improvement have not materialized, leading to a clear failure of the thesis.
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