I have been meaning to dump this one for sometime. It’s been a non-performer, both as a stock and as a business, so I used today’s pop to get out. Just a look at some numbers shows how poorly this company is performing:
o Net sales for the year 2014 improved to $1,193.0 million, up 1.3% from 2013 net sales of $1,177.4 million. Gross profit for 2014 was $357.9 million, or 30.0% of sales, compared to $351.7 million, or 29.9% of sales, in the full year 2013.
Interpretation: Marginal improvement in sales and gross margin. There’s no growth here.
o Net income for the year 2014 was $81.9 million, or $2.67 per diluted share. This compares with net income of $83.2 million, or $2.60 per diluted share, for the year 2013.
Interpretation: No earnings growth.
Here’s the bit from the 2015 outlook:
oBased on our current backlog and order expectations, net sales for 2015 are expected to be in a range of $1.05 billion to $1.2 billion and diluted earnings per share are expected to be in a range of $1.60 to $2.10 per share with earnings weighted more to the second half of the year.
Interpretation: No sales growth continues, and please accept nice earnings decline.
I was puzzled to see today’s near 20% pop at one point. I sold at around 17% pop, and I 'm happy to have my cash back on this one.
Anyways, of course, I could be wrong, I am probably wrong, but I 'm sure of one thing. There are many other equally good if not better opportunities in the Rule Breakers scorecard. I 'm looking just at the Best Buy Nows and they look much better than this one.