Sunday, May 20, 2012

"The US markets have been really UGLY here, discounting Europe and the gyrating Euro, but there are plenty of stocks out there from California to Alabama that have great fundamentals & businesses"

Dow Jones Industrial Average 12369.38  (Down)  Week ending 05-18-2012

"Maximilian ...Maximilian"
"The secret to riches, lab rats, is the same as the secret to comedy: .........  Timing", 
              quote from Maximilian Skinner in Ridley Scott's movie adaptation of Peter Mayle's book, "A Good Year".

Timing. The correction in the market has created a timing opportunity to pick up some really good stocks with great fundamentals at some very reasonable prices. I will talk about two of these stocks, one from California and one from Alabama.

Deckers Outdoor Corp. (Symbol DECK, $53.22) is a Goleta, California based designer and producer of footwear and accessories such as handbags and outerwear. Deckers has been effected negatively in the last quarter by their business in Europe. I guess when Europeans get sad they stop going out to buy their UGGs. Well, they should probably buy this stock and their UGG's and get happy again.

The PE on Deckers is sitting right now at a very reasonable 11.70. DECK is projecting 2012 fiscal year earnings of $4.56 per share. 2013 earnings projected at $5.48 per share.
The 5 year sales growth at Deckers is 41.35%. The Greeks could learn something from this company. The 5 year earnings
growth is 40.11 %.
Spain, Portugal listen up to what I'm saying.

The Timing part that Maximilian was talking about is the PEG ratio here of 0.87.

The stock has a Return on Equity of 25.38%. Although the stock is off 40.26% this year, it still has a 3 year return of 217.98%. I can see no other alternative except to purchase the stock and sit back and have a fine French Bordeaux and wait for your money.


Uncle Henry Skinner , "You'll come to see that a man learns nothing from Winning. The act of losing, However, can elicit great wisdom"

I think it is time to move on to Alabama, for our next stock with good fundamentals.

Hibbett Sports Inc. (Symbol HIBB,$ 54.94) based out of Birmingham, Alabama , operates sporting goods stores in small to mid-sized markets predominantly in the Southeast, Southwest, Mid-Atlantic and the Midwest. 
This company has a one year Total Return of 40.91% and a 3 year Total Return of 207.79%.  They don't care about Europe, because they have the Crimson Tide, of The University of Alabama. College Football country.
No Soccer here!  HIBB, has five year earnings growth of 24.64%. The PEG ratio here (Price/Earnings to Growth ratio) is a very reasonable 1.20.

 2012 earnings per share for HIBB are projected at $2.56 and for 2013 it is looking like $2.91 per share. Looks like a pretty solid investment.Sporting goods seem to be one of the items that make people happy and get them through hard times and good times. 

So Freewilly says " Roll Tide, and Roll with the stock of Hibbett Sports" 

Freewilly,  signing off .............Good Bye.


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