Thanks for printing the gist of the article. You, however, did not express your opinion on that ? What are your (and the thread's) opinion about Mr. Kass's logic ? He presents some compelling arguements, in my opinion.
Because of my cost basis (I purchased OO at 20 1/8 and 15 1/2), I am stretched very thin. What I am doing right now is using any rallies to write covered calls (in the money) on approx. 1/3 my holding (I sold some Jan. 10 recently during the pullback from the "11" rally over the last 2 days).
For what it is worth, I will include info from an article in Forbes about how it is "smart" to buy such stocks now (in the winter) and hope for a more normal summer (unlike the rainy one that the past one was). It did not mention OO specifically, but it did mention RAYS. Hopefully, it will offer some counter weight to the market sentiment that seems to be dragging OO down. It says :-
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Sunglass Hut International (7) is a "category killer" because
of its 30% market share. This stock has collapsed by more
than 75% from its March peak because of a slowdown in
sales caused by an abnormally cool and wet summer. This
was compounded by an aggressive expansion program
resulting in a substantial increase in inventories.
The stock has few friends on Wall Street, but it seems to
be doing some right things. It has broadened its product
line to include watches, and is focusing attention on better
inventory control. The problems appear to be rather fully
discounted, as the stock is selling for only 8.2 times
projected fiscal 1998 (year ends in January) earnings of 85
cents. Sunglass Hut makes most of its money in the
summer, and so the best time to buy the stock is in the
winter when earnings are low. This stock could easily be a
double with a more normal summer.
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Shivu |
