market folly

Fred Liu's Hayden Capital has penned an in-depth write-up on Zooplus (ETR: ZO1), a leading online retailer of pet food and supplies in Europe.

They see a return of around 20% per year as the company has 50% market share in its category and is the low cost provider.

Hayden notes the company's 94% sales retention rate and 31% annualized sales growth since 2010.

As far as risks go, they cite what any retailer fears: the looming Amazon (AMZN) threat.  Hayden counters that AMZN's European distribution centers aren't equipped to handle heavy, bulky items and points to Chewy.com's success in the US market. 

Also, Hayden acknowledges that there's some degree of 'key man' risk here as CEO Cornelius Patt has been a 'visionary' and losing him would be a big detriment.

Embedded below is Hayden Capital's full thesis on Zooplus:



You can download a .pdf copy here.