Skechers: Bad company or bad quarter?

Interesting article:

Investors should turn their focus to China and India, where the true growth for Skechers will be realized. Although they represent a small portion of sales now, the brand seems to be performing particularly well in that region. Skechers increased its store count in India by just 19% and saw sales explode by a triple digit percentage. Skechers is more established in China, but nonetheless notched high double digit growth in the country. As it stands now, there are around 300 Skechers stores and roughly 3 billion people in India/China. That turns out to be 10 million people per Skechers store. This incredibly low market penetration enforces my belief that growth in that region has a long runway for success.

I believe this quarter was a bump in the road and that significant upside remains for Skechers in the long-term. It was a bad quarter, but it shouldn’t have warranted a 22% drop. I think the dramatic drop was because the investing community believes that the growth phase in Skechers is over. And I agree with them….domestically-speaking. However the growth story has changed. The market in the U.S. is simply too competitive and saturated for any real growth to be realized. However, I restate from my previous article that Skechers is still a growth company due to its tremendous potential in Asia and the rest of the world.

Read the entire article at…

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To add to the bull thesis - at the current price, Skechers could even be a takeover target…

That doesn’t mean I’m telling y’all to buy up SKX, but I’m holding on to my shares at the current price in expectation of better days in the short-to-medium term, not to mention the long term.

And the article echoes Saul’s words about “the con”. I think some of this con is deliberate, but a lot of it is people buying because they think it’s going up without a sense of actual value.

There was a “teaser” I read recently for a financial advice service that said that it was foolish to “buy low, sell high,” since it was much more profitable to “buy high, sell higher”. Going into George Costanza mode, I immediately sold my 5 shares of Ulta.