Shoes: Skechers surprises, misses, cuts '09 earnings estimates and gets downgraded by three analysts. Stock drops sharply to about $7.45 - and is still above analysts new reduced targets ($6.50-7) for '09.
I'll up my position. Company is generally profitable (past ten years anyway), has little ltd, and has plenty of cash (a price:cash ratio of about 2.3 to 1.
si.advfn.com^SKX
biz.yahoo.com
At my quick review here, analysts main concern seems to be excess inventory. On the one hand, this is a problem that SKX has faced before (so maybe the controlling managers/stockholders aren't so sharp if they're finding themselves with the same problem again). Otoh, consumer spending is down sharply everywhere apparently, and eventually SKX will again better control inventory overhang.
The shoe business is a very competitive one, influenced heavily by fashion changes. It may not be a growth sector, but shoes are bought,worn, replaced. I expect SKX to fight and get its share of the business. I am betting that at some point, as in every year in the past ten, SKX will again sell at least at stated book value (now $15).
I look for double in SKX within 18-24 months.
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Oops. I see from this previous post I was not sharp enough to buy FL when it was near lows ($4.36 in Nov. vs. $8.24 now). |
