The most important metric when fishing through this pool of rubble is net cash per share/price. Before I could even contemplate a turn around, I need to be reassured the stock will not go all the way, to zero.
In my opinion, here are the names with the best cash positions.
ZNGA, SNE, EA, IRBT, CAJ, FB, DELL, LXK, NILE, GME, CMG, COH, DECK, NFLX, NOK, RIMM and GRPN.
There, I’ve narrowed the field.
Now I want to look for growth potential. Without growth, there will be not be a sustainable turn around.
GRPN, EA, CMG, ZNGA, COH, DECK, NFLX, and CAJ.
Pure wreckage factor. What stocks are beaten down the most. I know that seems like a simplistic theory, buying stocks that are down the most. However, sometimes the biggest winners are the stocks that get sold off the most, unduly of course.
ZNGA, GRPN, CAJ, DECK, EA, TIF, CMG, COH, NFLX
Ok, that was no help. All of those fuckers are beaten down. Let’s try FPE ratios under 20x.
DECK, EA, GRPN, COH, TIF
Last but not least, full scan of the fundamentals by The PPT (gross margins, p/b, p/s, PEG ratios, debt/equity, profit margins).
DECK, COH, TIF
There you have it: my top buy and hold picks for discounted brands are DECK, COH and TIF. Those are my methods and they’ve served me well. Going with the highly speculative names, like EA, ZNGA and GRPN, offer a much greater potential upside. However, it is my belief, the above names will give you a more comfortable ride, chauffeured by gentlemen in top hats.
If you enjoy the content at iBankCoin, please follow us on Twitter
I like TIF, however I dont see the turn around story in DECK. I admit I have not done due diligence if you’re seeing it in their financials, but I believe your definition of turn around is the “story”. Interested in your idea if you would be so kind.
I would love to go back and forth on tweaks to this, but I’ll just point out that they are all retail, high end even. Also, I know you’ve been in TIF and DECK before. I rode DECK just my wife told me she wanted a fucking pair of snow boots and it doesn’t snow here… ever.
One question, if I may be so bold, What minimum time frame? 1yr?
Min is 1 yr.
All retail, but it wasn’t intended to be that way. It just so happened, they had the best fundies.
With regards to DECK:
a cold winter changes the story 180 degrees.
I take some solace that 2 of my 3 finalists were EA and TIF, which at least made your cut.
My 3rd pick was BBY, which I’l be quick to admit is much more speculative. However, I have a hard time imagining the last major electronics retailer goes belly up with effectively no competition and with AMZN soon to be taxed. But COH or some of the others would be a more certain pick.
Catching up on the news here, I see the Knight Capital HFT algo apparently did what Joe retail does all day long… buy at the ask and sell at the bid. What a shame, that this is totally not acceptable and considered a major screw up. LOL
Retail brands are the most likely to get shit canned by the youngins going forward. When raised in a depression on foodstamps the brand could become an asshole letter. May be to bearish in this view but the kids will not think like we do. And already do not. This is not the 90’s in america it is the 30’s.
TROll
I concur.
I agree with you, Fake Amish, at least about the bottom 80% of people, being in the 30s.
But for the top 20%, this really is the 90’s. And the middle and lower classes never bought much at places like COH and TIF to begin with.
Just pointing out a possible trend change. Stocks tend to die for a reason.
Fake Amish is a troll
No doubt (no Stefani)
I may have to buy some of this DECK
Fake Amish is not long or short. He got no money. He is only here to bum out. Troll
Imagine calling yourself fake Amish to begin with. Where the fuck are your trades?
Fake Amish is a stinking piece of human sewerage. Not to put too fine a point on it
Quit ragging on each other. That’s so 2008.
I like those top 3 names, but I (personally) would diversify sectors. I like the cash position ZNGA holds but do not like how they have to rely on FB. Also, it is just pure speculation that FB would acquire them. GRPN is another one, social/tech, that I like based on cash and the other factors you lined up. I am just not a fan of the accounting issues they’ve been having and the rising of “clones” or competition (LivingSocial[AMZN]/Google).NFLX might be worth a shot for some tech exposure but AMZN prime/AAPL is also invading the space.
ZNGA violates the unwritten rule of “don’t buy stock in a company that just dropped big bucks on a new HQ.”
VOD WPC MWE NGLS. GOOD NITE
Of those names, I like LXK and GME.
1/4 oz. Liberty raffle link.
Good Luck: http://goo.gl/qJyW6
Brokeback olympics are getting less bitchy. Is the 0 coming back a bit in the polls?
DECK, COH, TIF
all over $40 per share….too much downside potential.
Valuation has nothing to do with stock price.
Come on!
You are correct sir…and among most experts, your view is 100% supported.
Some stocks are analogous to exquisite diamonds.
Just my___ * get * rich * fast (or not) opinion.
you nailed it…I love DECK TIF and COH – all have massive PRICING POWER!!!
please add CMG…as your bonus idea…
TIF is a fantastic brand.
TIF, unless we get QE/LTRO, looks like 33ish in my Nymph Fibo world.
Fly,
Thanks for the informative post. I realize most of the street uses forward PE but given the uncertainty would you give more credence to historical PE- and if so what # would you look for before buying?
If the economy gets worse, as it could there will be less discretionary income required by these picks. I don’t wish to hold anything for a year. But, what do I know.
Draghi drags his ass!
Seems like Europe enjoyed his speech!
Europe no longer is enjoying the news!
The coming winter will be very cold.
We have our friend visiting- El Ninio.
According to some weather articles I’ve read, this can be the perfect opposite from last year.
It’s funny how fast the analysts can scruple to upgrade Deckers once they realize that winters do return eventually.
They normally upgrade after the stock is already up 100%.
They get no criticism and they are ponds of hedge funds, so no one ever tracks their horrible records.
I thought El Nino produced much warmer winters than normal? Back around 1998 or so it sure did and absolutely crushed energy companies in the process.