If it's of any interest to you, I've been doing some very brief WWW analysis since reading that thread mentioned above.
If we look at the WWW chart, WWW Stock Chart - Wolverine World Wide, Inc. - Stock Analysis, you'll notice the stock peaks in 1998 and falls through 1999 and does very little until 2000.
What's interesting is why the stock fell. EPS (diluted) for '96, '97 and '98 were as follows: $33m, $42m, $42m. Earnings weren't the problem - cash flows were.
OCF was as follows: $17.4m, $(0.2)m, $(4.5)m
The reason for the poor cash flows was due to not billing receivables and overspending on inventory.
By 1999 cash flows improved to $47.2m and by 2000 cash flows had improved to $71m. At that point, the share price began to resolve upwards.
My point here being simple - with WWW, historically, cash flows have driven the share price. And recently that trend seems to follow.
In 2022, WWW had cash flow of $(179)m as they purchased too much inventory. So far, this year, they've only generated $7m of OCF. Since these numbers are weak the share price stays low and multiples will stay low. As cash flow begins to come back primarily from working capital management (that's my assumption), the share price may do what it did in 2000.
As for me, why I like the stock - adjusted cash flows are much higher than GAAP cash flows. I've explained this on my website but didn't mention any of the problems above. I only went back to 2006. Should have gone back to the late nineties.
Perhaps the catalyst is much simpler than a successful turnaround and delevering. History certainly seems to suggest that.
EDITED- to be clear, in 2020 and 2008 cash flows didn't drive prices. Worsened expectations did. As for the 2015/16 poor performance, I think it comes down to overly optimistic expectations but I could be wrong (see links below).
Wall Street Concerned About Wolverine’s Ongoing Challenges – Footwear News
Wolverine World Wide Stock Dips On Mixed Q1 – Footwear News |
