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Strategies & Market Trends : Roger's 1998 Short Picks

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To: RumbleFish who wrote (13059)8/22/1998 12:11:00 PM
From: Mad2  Read Replies (1) of 18691
 
A quick look at this company shows a couple of things, 1) They have done shareholders well in a business that isn't growing (ie mens suits) as share price has risen from $5 in mid 92 to it's current level. 2) It appears that when insiders sell they time the market well. Bottom line is the company has done a good job using debt and equity to grow sales and shareholder value. However as to the future it doesn't appear that they have plans to open new stores ($30mil in new equity last summer was used to open around 45 new stores in the last year) as such their sales and profit growth will likely slow. Additionally earnings this past year have likely benifited from the strength of the dollar. How much more well they get here. IMO this stock won't tank overnight (unless the market does), but rather decline slowly as to reflect the P/E of a mature slow/no growth business. If your bearish on the market shorting this one could be a conservative bet in that direction.
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