Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: E_K_S	2/14/2013 1:53:05 PM
	Read Replies (2) of 78921

Orchard Supply Hardware Stores Corporation (OSH) - Started a speculative position This may not be a true "value" buy but if they start to generate some earning from their remodeled stores, it could be. What led me to this name was gizwick review on the 50% thread. You really have to overlook the most recent quarterly reports as the company has been remodeling their stores and/or closing them. Lot's of special one time expenses. Many stores are near me as I live in the heart of where this specialized hardware store started. Eddie Lampert spun these properties off in an IPO in 1/2012 around $25.00/share. The company owned real estate is their most valuable asset. I have experienced one completed remodel and it turned out very nice. They will get my business when i do my Spring buying. The Value Proposition When compared to HD and/or Lowes, OSH for me is a better value looking at the current market prices for each company. This assumes that OSH will begin to post positive earnings in the profitable Spring and Summer sales season. OSH's retail products cater to the markets they sell into. Their outdoor patio products are quite nice (IMO better than HD). The store does provide very good individual customer service too. The problem is that retail margins are quite thin. Recent buys by Eddie Lampert shows he was acquiring shares in August 2012 and now owns 1.02M shares or about 18% of the company. Why is he buying after he got most if not all of his money out on the IPO on 1/2012? I suspect he sees a value buy. Of course he exercised options at a much lower price but he is a smart investor and that was the time where OSH disclosed their store remodel and upgrade program. For me, this is a high reward low risk buy and hold. I expect to see higher EPS after the Spring and Summer season and expect this to translate in a higher stock price. My price target is $14.00-$18.00 per share but it really depends on how the new "same" store sales translate into higher EPS. The company carries a lot of debt and many of the other value metrics are off the chart. The story here is all about ramping up those sales w/ their remodels and see if they can beat their $0.51/share earnings that they reported in the 2012 IPO. HD and LOW sell at 20 PE. My guess OSH should sell at 17 PE if they can show same store growth. To do that, OSH will need to post $.80/share EPS next year. (Note: My position is small about 0.2% of the taxable portfolio and would like to grow it into a 1% position before i start peeling off shares). EKS

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next