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No. of Recommendations: 0
This stock seems to be ready to go up but it has to get noticed out
there. There are 3 brokerages following it
so they might be crunching the numbers now and in a few days might reaffirm
they "buy" recommendation. Fundamentals are solid
and turnaround is completed and has been succesful. The company has shown
focus for the last 2 years with the new CEO. Sales and
EPS have increased due to efficiencies (cost control, better pricing and better
store layouts). From now on the increases in EPS
and sales will be more substantial because of the projected opening of new
stores in 98, 99 and so forth.... (15-20).
SCVL will easily beat First Call Estimates of .02 cents a share for this last fourth
quarter (ended Jan 31). Just look at the following numbers:
Nov sales: 17.9m (fact)
Dec sales: 27.9m (fact)
Jan Sales: 11.6m (personal forecast which is conservative because it assumes
that sales will equal 97' January)
Total: 57.4 mill
Assuming net margin at 2.5% (conservative compared to what they have
achieved recently)

#shares = 13.5 mill

then EPS = 0.11

0.11 BEATS 0.02 and places annual EPS at 0.63/share giving this stock a
trailing P/E of 12-13 at present prices. Definitely a bargain if we believe there is
room to grow SCVL EPS at 19-22% in the future.

aNYWAY, WE'LL see what happens but in the meantime it seems that this
stock is a bargain at current prices. One more thing: stock options held by top management(average
price) is at around $6- $6.5 which is nice because executives have an incentive
to increase shareholder value now, not like some other companies I have seen
where the stock options are already very well in-the-money and the company
only buyback stock to pay for the options......(a very expensive thing and a cash
flow handicap for the company)
A final thought: The stores are nice and the shoe retail business is a nice one if variety of offerings is good, cost controls are in place and the customers perceive to get VALUE for their buck. (3 things that shoe carnival has today).
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