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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (47630)	4/26/2012 12:49:58 AM
From: Spekulatius	Read Replies (2) \| Respond to of 78470

re KSS - i don't think that the debt level is too onerous at this point. They bought back a huge amount of shares last year but that will slow down to about 1B$, which is a little less than the free cash flow (1.1B$ in 2011). Dividend is about 270M$, so there will be a small increase in debt this year too but nothing substantial. Essentially their depreciation is equal to their investments, so they are in steady state operating mode. Their business model is to operate cheap - cheap standalone locations, low operating costs and they are pushing their own store brands. Their same store sales took a 10% hit in the great recession and heave been steady since at ~220$/ sqft, which is much less than a good mall location sells (>300$/sqft) but then again their locations are much cheaper to rent. the problem with these mall locations that most of the good economics accrue to the mall owner, not the stores themselves, via rents, so i like KSS business model. KSS owns about 35% of their stores and the rest is leased. I think they do a good job with e-commerce and using it to drive traffic in their stores. We bought a few things online and I felt the deals were good and their website works well too. I am thinking ~45$ would be a good entry point for the stock and I would be a likely buyer there.