Skechers omens?

Investment Analysis Clubs Saul’s Investing Discussions
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Nike reported recently and got clocked on weak outlook. Today it was Wolverine (WWW), maker of Bates, Hush Puppies, Keds, Merrell, Saucony, Sebago, Sperry, and other brands. WWW missed on the top line and also noted a soft consumer market, as have many other retailers.

Maybe SKX will be fine, maybe not. Analysts’ consensus estimates have been falling steadily over the past 3 months–down to $1.80 (from $2.09) for this year and down to $2.06 (from $2.48) for 2017. On the one hand, that makes the hurdle easier to clear. On the other hand, it’s not exactly signaling a healthy market ahead for SKX.

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Thanks
Ya I sold mine

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Unless the world is moving away from footwear, I don’t see a long-term issue. What am I missing?

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What am I missing?

Growth at something greater than the rate of population growth?

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SKX was a favorite of this board for almost two years and the hype was sky-high. The fact that members of the board are giving up and selling means that the bottom for SKX is in place.

You guys are probably the last of the sellers.

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Nike reported recently and got clocked on weak outlook. Today it was Wolverine (WWW), maker of Bates, Hush Puppies, Keds, Merrell, Saucony, Sebago, Sperry, and other brands. WWW missed on the top line and also noted a soft consumer market, as have many other retailers.

Maybe SKX will be fine, maybe not…

And maybe these other companies’ misses are allowing SKX to take share.

The truth is, until SKX announces nobody knows (except SKX insiders, I guess).

I’m holding as I think SKX is currently undervalued and going to be fine.

We’ll find out tomorrow, hopefully not a repeat of last quarter’s report (I’m thinking it’s going to be the opposite).

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You guys are probably the last of the sellers.

I’m not selling and will look at getting some leaps.

Here is a cross-post I made on the Skechers board that is relevant here.

Skechers is now at a value point (12.4 P/E as of yesterday’s close) we haven’t seen since it was losing money back in 2012.


Qtr	EPS	QoQGr	TTMEPS	TTMGr	Hi	Lo	Close	P/E	P/E Hi	P/E Lo	1YrPeg
Mar-11	$0.08				$7.89	$5.95	$6.85				
Jun-11	-$0.21				$7.16	$4.43	$4.83				
Sep-11	$0.06				$5.96	$4.44	$4.68				
Dec-11	-$0.39				$5.14	$3.92	$4.04				
Mar-12	-$0.02	-129.2%	-0.57		$4.90	$3.74	$4.24	-7.5	-8.6	-6.6	
Jun-12	-$0.01	-93.5%	-0.37		$7.17	$4.17	$6.79	-18.2	-19.2	-11.2	
Sep-12	$0.07	29.4%	-0.36		$7.46	$6.02	$6.80	-19.1	-20.9	-16.9	
Dec-12	$0.03	-106.8%	0.06		$6.91	$5.06	$6.17	97.4	109.2	79.9	
Mar-13	$0.04	-285.7%	0.13	-122.9%	$7.54	$5.67	$7.05	54.2	58.0	43.6	-0.44
Jun-13	$0.05	-450.0%	0.19	-150.9%	$8.17	$6.66	$8.00	42.1	43.0	35.1	-0.28
Sep-13	$0.18	140.9%	0.29	-182.2%	$10.52	$7.98	$10.37	35.4	35.9	27.2	-0.19
Dec-13	$0.09	250.0%	0.36	468.4%	$11.65	$8.87	$11.04	30.7	32.4	24.6	0.07
Mar-14	$0.20	369.2%	0.52	300.0%	$12.26	$8.82	$12.18	23.4	23.6	17.0	0.08
Jun-14	$0.23	385.7%	0.70	268.4%	$15.84	$11.05	$15.23	21.8	22.6	15.8	0.08
Sep-14	$0.33	88.7%	0.86	192.0%	$21.56	$14.82	$17.77	20.7	25.2	17.3	0.11
Dec-14	$0.14	53.6%	0.91	151.9%	$20.78	$15.92	$18.42	20.3	22.9	17.6	0.13
Mar-15	$0.37	80.3%	1.07	105.8%	$24.75	$18.41	$23.97	22.4	23.1	17.2	0.21
Jun-15	$0.52	127.9%	1.36	94.3%	$38.26	$23.33	$36.60	26.9	28.1	17.2	0.29
Sep-15	$0.43	29.0%	1.46	70.0%	$54.53	$36.53	$44.69	30.7	37.4	25.1	0.44
Dec-15	$0.19	32.6%	1.50	65.8%	$49.28	$24.56	$30.21	20.1	32.8	16.3	0.31
Mar-16	$0.63	71.8%	1.77	65.1%	$34.27	$25.47	$30.45	17.2	19.4	14.4	0.26
Jun-16	$0.60	16.1%	1.85	36.0%	$34.20	$25.89	$29.72	**16.1**	18.5	14.0	0.45
============================================================================================
_Sep-16	$0.47	9.3%	1.89	29.7%	$70.76	$26.45	$22.92	**12.1**	37.4	14.0	0.41_
_Dec-16	$0.23	21.1%	1.93	28.4%	$72.25	$27.01	$22.92	**11.9**	37.4	14.0	0.42_
September and December numbers are estimates pulled from Yahoo Finance.

According to the expectations management outlined on the last earnings call, this is a very good time to buy more of the company. The P/E range over the last 8 quarters is 14.0 - 37.4.

Here is a table showing valuations over that range.


P/E	10	12.1	12.5	14	20	25	30	37.4
Price	$19.30	$23.35	$24.13	$27.02	$38.60	$48.25	$57.90	$72.18
Return	-16%	2%	5%	18%	68%	111%	153%	215%

If we get back up to a P/E of 14 and if they hit their earnings this quarter and next, we’ll see almost 20% appreciation by the end of the year.

Who knows what will happen if they exceed them and guide a little higher?

DJ

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Skechers misses by $0.05, misses on revenue
Down nearly 15%.

I still have a a large portfolio of SKX after selling a few hundred earlier this week at a loss. Unfortunately I bought most when the story was good and the price at or near its peak.

Another lesson learnt. Followed the ideas discussed on this board but was late in the game.

The same with SWKS, INFN, INBK etc . All these stocks had/have low P/E low PEG when I bought but other factors had more influence on the price than these ratios.

Cheers.

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DJ wrote:
I’m not selling and will look at getting some leaps.

Curious what you buy if you go this route. I see the 2019 leaps are available but will have to see what they look like after market opens.

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