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No. of Recommendations: 6
Do you shop at Tuesday Morning, or do you know anyone who shops there?

A quick scan of Yahoo Finance shows data points that I like, to wit: 1) single-digit P/E, 2) high returns on equity, 3) meaningful insider ownership, 4) high-quality net worth (i.e., no intangibles), 5) low debt repayment period, and 6) high dividend yield.

As for free cash flow, the number is all over the place over the last five years. In some years working capital was a source of cash, in other years it was a use of cash. Still, positive operating and free cash flow every year since 2001.

At $14, Tuesday Morning's EV/FCF ratio is 13x.

I first looked at Tuesday Morning a few years back but was turned off by the operating cash flow losses in quarters 1-3 and operating cash flow profit in Q4. Given that the company is a discounter (versus, say, a children's clothing store where you get a back-to-school spike in Q3), operating cash flow should be pretty stable across all four quarters. You would think. But again, I have never been in the store so I have no idea what I am talking about.

If any readers tell me they like shopping at Tuesday Morning, I will fire up the Earnings Power spreadsheet and run the numbers and then post a link on this site.



Hewitt
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