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Author: BShaw010 Big red star, 1000 posts Old School Fool Ticker Guide CAPS All Star Mission Olympia 2 SC1 Red SN Explorer 1 Mission Team Member Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121  
Subject: Re: Competitors? Discontinued Products? Date: 11/3/2008 12:09 PM
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Way to find three year old news that is completely out of date :-).

Just kidding. That article did in fact foreshadow the approximately 90% drop in stock price that has happened since then. I agreed at that time that the stock was completely overvalued after having that much debt dumped on the books.

I'd argue that today is a different story though. The company continues to grow despite increased competition and overall economic conditions. The current valuation is ridiculously cheap based on just about any of the standard metrics (P/E, PEG, DCF, etc...). At less than $5, this company is priced like it is going to go out of business. The debt is still an issue, but the company is generating good (and improving) free cash flow which will help cover the debt over time.

The key to me is that the business model hasn't changed. The company continues to open new stores, and at least near me the stores are packed with loyal customers (haha, including my wife) that swear by the products.

Based on the company's valuation, recent performance and planned growth, I personally think we'll see the stock price back at $30 in 3-5 years rather than at $0. If you are looking at today's prices as an entry point, $4-$5 is very cheap for what this company has to offer; a simple recovery back to the company's 52 week high would yield a multi-bagger that anyone would be happy with.

Just my two cents...


Brian
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