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VFC throws off a pretty good free cash yield. That doesn't mean the company's going to grow it's revenue at a great pace; and there's only so many brands they can afford to purchase before it starts getting ridiculous and cannabalizes their existing brands.
But, they can use that cash to buy back shares, which adds the bonus of increasing earnings per share; and assuming a stable p/e, boosts the stock price. How much is an interesting question. At the present quotation, if they used their entire cash flow (after capital expenditures and dividend payments) to just repurchase shares, they could buy back about 10% of all shares outstanding.

A rather interesting thought for you is that after about 10 years (assuming the stock price doesn't change), they could buy back all their outstanding shares and just take the company private. Not only savings a tremendous amount of money in dividend payments but losing all the regulatory costs involved with being a publicly-traded company.
Probably won't happen, but it's a point to ponder anyway.
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I am amazed at how undervalued this firm is. In spite of accusations of poor management, it's throwing off considerable free cash, paying a 3%+ dividend, and is in an industry where it is unlikely to see demand drop sharply.

I'm quite prepared to be paid 3.5% to wait for the market to discover it. And any improvement to management methods could only benefit the stock.

Is there a downside somehwhere that I'm failing to see?

Off2Explore
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Have you bought any of their clothes? Mostly it's workers looking for cheap clothes that if they tear, no big deal. Price is the issue -- and not a lot of new customers flocking to their product. The kids don't think them popular. There's no flash -- and hence poor growth opportunity.
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Yes, I have tried and worn VFC jeans for about 2 yrs.now and they are far superior to Levi's and all of the so-called "designer" jeans. Lord Byron, have you tried them?
Anyhow,the price of the stock seems to be telling us all we need to know about this underrated stock: it is going up and up. Now, isn't that the best indication of true value?
I have also read where the co. has made some recent acquistions and contrary to the info. in your posting, the kids like VFC products. The co. has finally learned that it is the youth market that sets the trends and VFC has caught on.
Check out a store where they are being sold -- the empirical way, not just your opinion. In addition have you noticed the advertising?
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First of all, I'm glad to see this stock on the up-turn, and I see that it's down-turn the past few years, or at least minimal growth, has been due to a tech boom, and therefore little attention for a steady growth stock in a company with a mature marketing trend. Their clothes may not be flashy, yet for that reason they won't fall out of style, either. Check Abercrombie's stock the past few years against VFC, and ask yourself which you'd like to own. Also, their acquisiton of the North Face was probably a good idea; they sell themselves (and are pretty popular with the Greeks on campus here). Perhaps the company should create a more upscale brand - and market it wisely/agressively - to take advantage of the stock price and cash flow in such a mature business model. Does anyone know of other acquisitions they've made lately?

Thanks,

Bryan
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Hi Bryan
Yes, you got it right, this stock is on the move.
2nd straight day of making a new 52 week high (38.60 as I am writing this reply) -- this new high is set forth in most of the financial papers and players who trade off of it will keep sending it higher and higher. Then we will find out what the "hard news" is that has been sending the stock price higher: Wall St. likes the stock for some fundamental reason(s) but the price move of the stock preceded the "news".
"Good ol Wall St"; the insiders knew but no news went out; just have to interpret the price movement of the stock. As I said in my message of 3/08/01, the stock price was on the move and that was all you needed to know: BUY IT NOW!!! It is not too late; it will just keep going higher because somebody knows something.
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