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Skechers USA Inc. Message Board

  • buylowsellhigh88 buylowsellhigh88 Feb 21, 2003 4:13 PM Flag

    below book value

    and the weakest 4th quarter only lost 23c per share. why worry?

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    • corvette, it's good to see that some progress has been made in your case. Since you (correctly) recognize that print information is inherrently untimely, and therefore of minmal value, I will assume that you have discontinued use of the things you used to rely on from the public library. For those in the class that are new, that's not a joke. You can read back through corvette's postings on the board and see that was his primary resource for making decisions.

    • iwnot. try revenue and earnings growth for better metrics. for unprinted, try 'quality of guidance.' or try 'ability to run the business in adverse conditions.'

    • Further, here's another unprinted metric inventory/sales - an even better metric than inventory to book value for looking at how lean a company is being run (note chevette - the lower number is better here):

      NKE inventory/sales = $1.387B / $10.3B = 13.5%
      SKX inventory/sales = $148MM / $943MM = 15.7%

      Let's look at some others - DOH! these are real printed numbers that I see online. Oh well, maybe you might believe them.

      NKE debt/equity = 26%
      SKX debt/equity = 45%

      NKE sales/share = $37.91
      SKX sales/share = $23.67

      NKE profit margin = 6.9%
      SKX profit margin = 5.0%

      anyone else want to throw in a metric where Nike is better than SKX?

    • >
      Let's look at Nike, since you like the comparison so much. Nike's book value is $3.59MM and inventory is $1.387MM - about 39%.
      >

      Correction - those MM's should be B's.

    • at least someone clearly understands the importance of inventory in regard to this company.

    • >
      Find any company document, including SEC filings, that express our inventory in terms of dollars per share, and THEN you can make a sensible statement about them as a percentage of our book value.
      >

      So, the only way you can judge a company is based on the exact line items shown in financial statements?

      If all you can evaluate or compare companies on is printed numbers that others give you, and not do any analysis of your own, then what kind of research is it that you are doing?

      For companies in retail, with commodity products, inventory to book value is a very important metric. Inventory is dead money. It is invested capital that is sitting around doing nothing. When inventories for a company like SKX amount to more than 50% of book value, then it is a red flag.

      Let's look at Nike, since you like the comparison so much. Nike's book value is $3.59MM and inventory is $1.387MM - about 39%. So, Nike runs a leaner ship than SKX - this metric of inventory/book value proves it. You cannot dispute that fact - based on this metric, not printed in any document or SEC filing, we have learned that there is a metric that you neglected to provide that shows Nike is in fact better than SKX. I am sure there are others and they probably won't be found on a specific line item in a document or SEC filing.

      That is why when analyzing stocks/companies it is called RESEARCH and not copy/paste.

    • >
      Secondly, print magazines take so long to appear in their subscribers' homes, that those words were written many months ago
      >

      Since we all know you have trouble reading, I'll post it again "still outpace the averages over the long term".

      Further, underneath the table it states "Notes: Data as of Jan 29."

      >
      Third, Money is dependent on their advertisers for the vast majority of their revenue, and by mentioning Nike in that way, they probably got some under-the-table income from them
      >

      Hmmm, I suppose then that the other 17 contributed as well? Pfizer, Home Depot, Johnson & Johnson, Pepsi, etc. - all these household names - payola? Get your head out of the sand. Now, not only does chevette know better than everyone here, he knows better than the folks at Money magazine.

    • Mr. Corvette,

      It is not meant as a personal attack. It should be considered an entry into "the body of evidence".

      Now, let's talk about inventory treatment.

      I believe you will agree that if the item is in inventory, it means that either SKX has agreed to pay for the item, or they have already paid for the item. Until the item is resold, it is a liability. As far as we know, they will not be able to give the inventory away. An extreme example, but, they may have to pay to dispose of the inventory. All we know is that they have material that they PLAN to sell for a profit. BUT, until the inventory is sold, it is a liability. The inventory cannot be capitalized, it cannot be depreciated, it can only be consumed. Comsumed implies that it will either be used in their personal process to produce widgets or sold at a profit. We know their plan is to sell not consume internally. As the last filing, the material was dead.

      Let me add a little fuel to the fire. I assume that SKX deals with smaller wholesalers and retailers, it would be interesting to know the percentage of accounts recievable that is defaulted on. We want to believe that everyone pays, but in the real world, that's not how it works. Small business go under everyday.

      Your continued claim that inventory is an asset is WRONG, WRONG, WRONG. Financially speaking it should be and is treated as a liability.

      Please don't bother responding to me. I am not going to debate terms, words, ideas, or dreams with you.

      I am attempting to help you understand and maybe, just maybe, be profitable in the short term.

      Everywhere I read you name, you are proclaim (albeit not openly, but it is infered) to be knowledgeable, yet basic accounting and financial managment seems to escape your grasp.

      I have all the time in the world to learn and teach, but very little to debate a subject/topic that cannot be debated. This is similar to a argument that the world is round vs. the world is flat, and you have chosen to defend it's flatness.

      Good Day

    • >>>Find any company document, including SEC filings, that express our inventory in terms of dollars per share<<<

      One more time:


      Latest Balance Sheet shows 148MM
      divide by shares outstanding 37.5MM
      $3.95/share

      Call your broker, he'll tell ya.

      http://messages.yahoo.com/bbs?.mm=FN&action=m&board=20494263&tid=skx&sid=2049426
      3&mid=18210


      Unbelievable.

      Texasdave

    • Thank you. It was intended to be.

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