Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: E_K_S who wrote (76609)	11/27/2024 5:55:21 AM
From: Harshu Vyas	Read Replies (2) \| Respond to of 78523

Personally, my initial view is that I think it's a value trap. Retail is a damn hard business to win in. It's only because it's in front of everyone's faces that investors feel they ought to take a position. I guess it looks cheap relative to most metrics. But, note that my generation (and me, too, now) buy everything online now. Maybe we go into stores to get ideas of what we want. But foot traffic shouldn't be confused with sales. Furthermore, balance sheet investing has almost never worked for me without earnings also improving. So unless you can find a near-term catalyst that actually results in the company's fortunes turning, I think it's difficult. Just looking a little closer, it also depends how you value the business - if you think the RE is core and can't be used against the debt (inc lease liabilities - not sure whether you inc finance leases though (so I haven't)), then EV is actually still quite high relative to recent cash flows. Otoh, if you think that a substantial amount of RE is noncore and WILL be monetised in the future, then the balance sheet looks a lot better. Of course, your job is to figure this out and then figure out whether management's course of action is correct. It's tricky (i.e lots of work) from the get-go. I don't know the story well enough and, maybe, management's plans will drive the stock from here. Or you can hope an activist comes along and forces management to do something. I always wonder what I'd do if I were in charge - for me, it'd be along the lines of close the worst performing stores, sell the RE/forfeit the leases, (of course, it's painful for employees so you have to be fair with how you do it etc), but then I'd use the excess cash to buy back stock and really hone in on the best-performing stores. Without knowing the full situation though it's hard to know exactly how many stores are underperfoming etc. Maybe I'm oversimplifying. But if management came out with a plan like that I'd buy shares. Idk about the Amazon stuff but I don't think it carries too much weight. Good luck with it, though.

To: E_K_S who wrote (76609)	11/30/2024 10:39:45 AM
From: Spekulatius	1 Recommendation Recommended By Harshu Vyas Read Replies (1) \| Respond to of 78523

Amazon has emphasized other retailers for returns like UPS, Lockers with 7/11 stores. They are much more convenient because the stores are smaller and set up for shipping or open 24/7 like the lockers with 7/11 stores. Going into the huge Kohls stores and standing in the line at the counter that also works as a register is just not convenient, so I think the Kohls stores get much use from Amazon customers. I know I go elsewhere.