K-Swiss (KSWS) - I already own Timberland. Should I own two shoe stocks? I am not a big fan of their shoes. I tend to be a Reebok man. Pretty funny, my eight year-old son only wants to wear Reeboks as well, “the acorn doesn’t fall far from the tree…”
Enough Philosophy. What about K-Swiss? Good question. My first thought was where did they get their name? Are they from Switzerland? Let’s see, they are in Westlake Village, California. Wait, here we go! They were founded by two Swiss brothers!
K-Swiss Profile.
Financial Highlights
- Revenues in the 1st Quarter were down 2.1% Y o Y.
- Domestic Sales are way down: 12.1% but International Sales were up 31%
- Future Orders for next 6 months are down 1.2% with the same domestic/international splits.
- Current Price: $27.35. 52 week range: $26.40 to $36.89
- Current Ratio: 7.45
- Cash per Share: $5.585
- Market Cap: $934m
- Earning Yield: 14% (per MFI)
- Return on Capital: 75% to 100%
This is a true value play. Very strong balance sheet, but company is struggling with sales in the US. Down 12% is a ton. However, that news seems to be reflected in their stock price. If they manage to turn their sales around, the stock price should jump back towards $36. Also, there has been some consolidation in the sneaker business and K-Swiss at these prices might be interesting acquisition target.
I think KSWS is worthy of future consideration. They will make it on to my short list.
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