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No. of Recommendations: 13
Disclosure: I have owned this stock since 2004 and I doubled up in 2005. This is a speculative play. I have written about this stock often (even on this board) and I wrote about it recently in the Inside Value board. My household owns four of this company's products

I am classified by Yahoo in the Consumer Goods sector under the Industry of "Textile - Apparel Footwear & Accessories". Morningstar classifies me under the Jewelry/Accessories industry, though both descriptions aren't accurate. I can only say that Louis Vuitton is a distant cousin.

I trade in the OTC market and I have been trading under a dollar mostly since 2002. Needless to say, I have been neglected by most investors for the following reasons:

I have negative bookvalue since 1999. ie. I have more liabilities than assets on its balanced sheet. I have Negative earnings in 9 out of 10 previous years. I operate in a lousy industry that makes products last forever with three years warranty. The replacement cycle is simply too long. Furthermore, I am a cyclical stock and is dependent on the economy doing well.

I do however, have the following positive attributes:

* Increased Sales since 2002 especially in Asia where I am a popular brand and even Richard Branson has started making ads featuring my products. The numbers show it as well:

Revenue ($M) 2002: 736 744 769 903 969 <TTM

* Starting to get my act together. I had a change of retailer/distributor in Japan in 2005 and I have started shifting from commodity products towards a more upmarket yet affordably luxury line through specialty boutiques. This has resulted in an improvement in Gross margins:

Gross Margin (%) 2002: 39.8 42.2 44.6 46.1 48.3 <TTM

* This is reflected in my drive towards profitability:

Net Income ($M) 2002: -71 -40 -28 -23 -1 <TTM

* Best of all, my capital expenditure is stable and my free cash flow is increasing.

Op. Cash Flow 2002: 13 22 28 35 91 <TTM
Capex (m$) 2002:-13 -11 -13 -12 -20 <TTM
Free Cash Flow2002: 0 10 15 22 71 <TTM

* My Long Term Debt is being reduced, and by similar token, my negative book value is turning towards positive:

Long Term Debt ($M) 2002: 470 362 326 337 297 <TTM
Book Value/Share 2002: -20.21 -23.39 -0.84 -1.01 -1.01 <TTM

Even though I am a brand name, I am cheap by valuation and currently spot a Price to Sales ratio of 0.2 and a Price to Cash Flow of 2.6.

Who Am I ?
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