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Skechers (NYSE:SKX)


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Any opinions?

 

$23 / share price

$7 cash per share

No/little debt

Trailing PE: 7

Forward PE: 5

 

The toning footware has boosted sales/margins...they are trading at a PE of about 10 when you adjust sales/margins downward assuming to 07 levels.  I look at it as a fairly priced stock (adjusted pe of 10) with a great balance sheet and a free embedded call option (who knows how long they can ride this toning footware gravy train or how big of a fad it will become).

 

Am I missing something?

 

By a comparison, when you adjust for cash, CROX sells for over twice the P/S ratio and over twice the P/E ratio as SKX, and has a higher absolute market cap.  Does that make sense?

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haven't done much research, why is cash flow so low?

 

For which period?  CF was more than NI in 2007, less than NI in 2008, more in 2009, and less in the TTM. 

 

It was less in the TTM because sales are up 25% in the TTM (because of toning footware) as compared to 2009.  That kind of growth in this industry requires significant working capital investment - I don't find that unusual.  Just hope they don't suffer the fate of CROX and have huge inventory write-offs.

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  • 2 months later...

 

I'm long on SKX, can't think of any real reason why they would be so low other than the institutions were disappointed with the estimates miss (it has very high institutional ownership, doesn't it?).  Well, their stock problem is somewhat of a pain so I'm assuming they will be able to manage it.

 

 

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What do they sell.  Pos?

 

My advice is to start dating or actually talk to a girl.  Then join me in deckers....no need to understand why these girls want ugly soft boots that cost a fortune...just understand that they will spend the money.

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Clearly, I am a fashion disaster.  But to the stocks...

 

It is interesting - Buffett is the value god so value is the buzz word.  And I get it with SKX.  The problem is that this market will reward growth and my guess is that DECK is not a value play but will outperfrom SKX. 

 

Sometimes when you buy something cheap you get something cheap.  SKX is an inferior business to DECK.  Let's not debate that.  The question, and one that several of you have opined already, is what is the better value?  The current price on the lessor business of SKX, or the current price on DECK.

 

I am not saying I have the absolute answer on this.  But supposed you had the choice to buy a company in the 80's where cash was 100m, no debt, and the market cap was $75m.  The company also generated 5 - 10 million per year.  Let's say you saw Microsoft trading at a 50 P/E. 

 

Where would have the better place been to place your money?  This is an extreme example (always the best way to analyze) - but the logic is why I am picking DECK over the sketchy SKX. 

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Mei - even the you may be broke on your stock picking, I will say (and if I read your post properly) that I am sure you look equally as great in those Sketchers as you would in a brand new pair of Uggs.

 

 

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Myth - just a little humor thrown in with serious stock talk.

 

But with DECK - where I live, you can't walk in public without seeing these things (Uggs).  It truly is amazing.  Growth has been off the charts.

 

Is it a fad?  I dunno.  Like I said, I am a fashion disaster.  But keeping an eye on sales of course.

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Dear God - $67.

 

You can buy all the damn sketchy shoes you want if you invested in DECK!

 

Truth be told, I just sold.  I will look to buy back though.

 

 

Forget the crappy company SKX - go with the growth in this case.  DECK is not that expensive relative to its prospects...SKX is a dog with fleas (per gg).

 

I'll be back in around $62.

 

Great weekend.

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  • 2 weeks later...

 

Footwear Industry Sales Report: November 2010 was posted yesterday at:

http://counterkicks.com/2010/12/03/footwear-industry-sales-report-november-2010/

 

"The driving categories for November were Toning, with sales up nearly double, Outdoor, up more than 30%, Running up about 20% and Basketball improving about 10%.

 

Toning, after some bumps and bruises, posted some strong numbers, as we begin to lap the surge from last year. Dollars sales improved more than 85% while unit sales grew 1.5 times. Average selling price declined about 25% to $75, as retailers reacted to the over inventoried situation, even as customer demand remained high. Sales doubled in the family channel (which provides 55% of sales). Sales grew 3.5 times at full line, as they were late to the game last year. Toning at the mall was flat. Skechers (51% share) grew by about half while Reebok (37% share) doubled. New Balance achieved 6% share in Toning and Avia 3.5%

While it will take some time for the Toning inventory levels to right size, it appears consumer demand remains robust."

 

 

Looks like toning is still going strong, same impression from the report for October.

 

"SKECHERS' investor presentation is scheduled for Wednesday, December 8, 2010, at 10:05 a.m. PST."

 

I guess it will be good news.

 

 

 

 

 

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  • 2 weeks later...

I admit when I am wrong, and boy was I wrong.

 

I just saw an ad by Brooke Burke telling me to buy Sketchers.  I don't even know what she said, but I went out and bought 5 pair.

 

I will do anything for that godess.  Except maybe buy the stock.

 

-Bronco

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Ok, I'm a full disclosure kinda guy.  So here it is .... my wife just bought a pair (without my permission) of these sketchy shoes.  So maybe there is a market for this sorry company.  And referencing my prior post - don't even debate anything with a Brooke Burke label attached to it.

 

That being said, DECK is now $85.

 

Just saying.

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Good news value investors.  SKX is much cheaper today than yesterday.

 

And DECK is a rip-off at $86.  It made no sense to buy this at $60, as the $20 point rise in a couple of months means it is a value stock disaster.

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Mei,

 

I know you own a pair.  They have also made their way (these Sketchies) into my family.

 

I have stated here that I will alwasy support Brooke Burke.

 

But I think the point here is what is the better business - Skx or Deck.  To me, and it is well stated here, I choose Deck. 

 

For the value investor, it becomes a matter of price.  But I would always focus on the good business and find FV there.  IMO it is too tricky for the little guy to exploit value in a bad business.

 

But best of luck, and you are right...don't trust analysts or accountants. 

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  • 4 weeks later...
  • 1 month later...
  • 1 month later...
Guest Bronco

No longer own deck.  Sold apple after the bell. Scaling in to google and berk last couple days.

 

Also doing some covered call stuff.

 

Also bought cna, which to me is cheap.

 

Also just sold my jnj. 

 

 

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  • 1 month later...

 

Bronco,

 

Obviously brilliant timing on my part... although still holding.

 

Lately I've noticed massive amount of women wearing all sort of types of [very] high heel shoes, like I've never seen before.  Any ideas?

 

Cheers

 

 

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