Message Font: Serif | Sans-Serif
 
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 ?
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.