Hibbett Sports ($HIBB): a pure-value play

In a nutshell

• Hibbett is a rather solid company within the demonized sector of athletic footwear and apparel distribution.

• This sector is under a huge reorganization, but Hibbett is expected to emerge reinforced from this process due to its differentiated business model, which provides a strong shield against disintermediation.

• Hibbett’s business model, focused on underserved communities, provides great value to the big brands (Nike, Adidas, Under Armour…), that would find it difficult to replicate.

• Besides, Hibbett is a profitable company, growing during the last 15 years, generating strong FCF, with no debt and improving its metrics.

• Current valuation (3.8x EV/EBITDA or 4.3 x EV/EBIT) doesn’t appear to be in line with the reality of the company and seems to be the effect of the market treating the different companies within the sector alike (regardless of their specific situation).

• If the company keeps executing, the market should finally recognize the higher value of this company and re-…