| Stock (Symbol) | Stock Price | |
Deckers Outdoor (DECK) |
$101 |
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| Data is as of | Expected to Report | Sector |
Dcember 7, 2011 |
Feb 27 |
Retail & Restaurant |
| Sharek’s Take | ||
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| One-Year Chart | ||
 This one-year chart of DECK was done before the stock dropped from $96 to $86. All the data used in this report is from 12/7.I like DECK’s P/E of 17, this stock is really worth 20-25 times earnings. The estimated Long Term Growth Rate of 17% is too low, this company grows faster than that. The red in the chart is from this summer when DECK embarked on a European wholesaling plan, which took money to build warehouses but will lead to profits in coming years. |
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| Earnings Table | ||
 Profits rose 49% last quarter. Sales growth was a robust 49%, above the 13%, 31% and 24% posted in prior quarters. Sales ballooned last quarter, that could lead to more moderate sales increases in coming quarters. This smells like an inventory buildup.
DECK usually beats the street, but has been known to lower future estimates, so estimate cuts could be coming next quarter. |
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| Fair Value | ||
 I did this Fair Value before the inventory news came out. Although I don’t have the confidence in DECK currently, the stock should eventually get to 25 times earnings. |
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| Ten-Year Chart | ||
 DECK has been a fantastic stock during the past decade — compounding at 53% a year. Still, there have been bumps (potholes) in the road and the stock is susceptible to big price declines. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
6 of 20 |
The problem I have in selling or Deckers is there’s not a whole lot of other growth stocks doing better. I think I’m going to ride this through, luckily most clients have a cost basis of $2 in the stock (purchased 6/11/09). |
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Aggressive Growth Portfolio
5 of 10 |
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Deckers got slammed by a research report put out by Sterne Agee. The analyst, Kenneth Stumphauzer, did channel checks and determined UGGs aren’t the hot-item anymore. Furthermore he expects after-Christmas orders will get cancelled. High supply is a serious thing in retailing, that’s why I’m paying attention to this analyst report (I usually ignore analysts, most of them suck). The analyst thinks there will be negative earnings revisions. Stumphauzer took his 2012 earnings estimate from $6.47 (above the average of $5.91) to $5.81. The $6.47 estimate seemed accurate from my end (its around what I would have had) and gives the call more credibility. Other analysts went on record after Black Friday saying sales were brisk that weekend, and that some sizes sold out.