| Next | Respond | Remove Navigation
To: +Paul Weiss (4 )
From: +Steven Yang Tuesday, Feb 11 1997 2:47PM EST
Reply # of 6
Paul,
I do not know why the shares in apparel industry slide. I guess to have a handle of that, one would need to know the general demand/supply of the industry, economy, interest rate, etc. I know none of the above with a confidence level that I am comfortable with.
On the other hand, I do have some opinion on BG. Shoes were a hot sector in Spring-Fall 1996. Thus, there were quite a number of sector and momemtum investors jumping in and out, which has caused the changes in price that can not be explained by company fundamentals. The company is not 'sin-free' either in that its 96Q3 result was not as good as it appeared to be. It beat the estimate, however, it was due to a better tax rate instead of the top line growth. Thus, one sees the share price goes down from 23+ to 15.
At the present price, the risk is very limited due to the divident yield and due to the book value. Given the kind of inventory, the book value reflects better the real value of the asset. [This is very different from the fashion inventory, and high tech. inventory. They would be worth very little when they are out of fashion.]
The company's potential is its turn-around story. As long as the company can make more than $1/share per year, it will have an improving balance sheet, which increases its chance of being a turn-around.
Regards,
Steven |
