John and Ben,
I think TNFI can be a good buy here, but with a lot of caveats. I like the company, I like the product (I bought a Kitchatna last summer that has gotten me through some nasty weather these past couple of weeks), but...
I think TNFI's rapid growth is very dependent on its continued perception as "hip", urban clothing. I can't say whether or not it will continue to be perceived that way...and that is what I think the support for TNFI's P/E ratio and stock price are.
I think a lot of TNFI's current marketing hype is glitz, too. I've talked to a local distributor and been to a Summit Shop. It increases visibility, but I personally would never go into a store just to check out the TNFI Summit Shop...it just isn't that cool.
And I think it's a known fact that fashion is fickle. I took my profits a while back, but I'm not ready to get back in. The low earnings part of TNFI's year is approaching...Q4 won't be as high as Q3, and Q1 and Q2 will probably be losses. If this stock trades consistent with its pattern, this won't be the only time it sees 20 in the next four/five months. I think I'm going to wait and watch to see what happens over that time, maybe think about getting back in around the mid to end of February.
Plus, I'll have more available cash at that time, too.
Good luck...I like the company, so I hope it does well.
As always, JMHO,
Chad |
