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Non-Tech : Cutter and Buck (CBUK) -- Ignore unavailable to you. Want to Upgrade?

To: upndn who wrote (92)	5/1/1998 3:41:00 PM
From: upndn	Read Replies (1) \| Respond to of 128

Stock of the Day (Archive) May 01, 1998 Cutter & Buck: A Tap-In Birdie The sport of golf is in a major upswing, aging Baby Boomers are hitting the links in record numbers, yet many equipment makers are struggling. It's the apparel stocks that are thriving in this golf boom. Cutter & Buck (Nasdaq:CBUK - news) has averaged 68% growth in sales over the past several years and profit growth has been in triple digits. Analysts are projecting a 30%+ growth rate for earnings going forward. Since we first profiled it eighteen months ago, the stock is up 150%. Cutter & Buck (Nasdaq:CBUK - news) designs, sources and markets upscale men's and women's sportswear. The clothes are primarily distributed through golf pro shops and resorts (where profit margins are huge), as well as high-end specialty stores. Cutter & Buck also targets corporations with promotional clothing such as embroidered shirts, so their strong presence in pro shops and specialty stores puts their brand in front of executives who are potential corporate clients. Part of the reason apparel stocks might be outpacing other golf-related stocks is there are some tangential trends that give Cutter & Buck a multi-dimensional business model. The sportswear can be worn not only for golf or tennis, but to the office as well. Cutter & Buck's high quality and style are ideally suited for office casual wear, a trend that has swept the nation. Business is booming, with revenues expected to top $70 million this year compared to $13.4 million in 1995. In the latest quarter, sales were up 67% and net profits soared 107%. Margins are rising nicely thanks to tightly-controlled distribution through golf pro shops and the like, where margins are fattest. With a fast-growing company like this, investors have to careful that the best days aren't already behind it. For Cutter & Buck, there is plenty of room for further growth since they have less than 30% penetration of the pro shops. The company is getting larger orders from existing accounts as well as signing up new customers among the 13,000 golf pro shops in the U.S. The IBD stock tables show Cutter & Buck has a 94 earnings per share growth rank and an 89 ranking on relative price strength, qualities that appeal to momentum investors. Even for value investors, at least the P/E of 22 times calendar '98 estimates is easily below the 30% expected growth rate (a trait not commonly found these days). The stock is 20% management-owned. With a market capitalization of $140 million and analyst coverage expanding quickly, it is attracting more widespread attention from institutional investors...especially if they spend a little time in the pro shop. <<<PE of 22 times calendar '98>>> What's not to like here??? ;-) Jim