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Select Comfort Corporation Message Board

  • jewhoo1 jewhoo1 Jan 26, 2013 6:10 PM Flag

    Back to 0.33

     

    Overprices, book value is $3

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    • Book value is one of the most irrelevant statistics for a stock. Generally, a stock's price reflects expectations of future earnings and earnings growth. Book value is only relevant to a company about to be liquidated, and with SCSS's cash flow, earnings, and profit margin, that is not a risk.
      After people stop reacting to the most recent poor quarterly profit and price momentum, the next report will be critical to whether or not prices recover. I don't expect dramatic changes until then.

      Sentiment: Hold

      • 1 Reply to chrismmaple
      • You're right. The next report. The next report is really about the veracity -- the HONESTY -- of this management team. So here goes investors again, with a relatively new management group, and we have to sort the B...S... tea leaves to figure out what happened.

        I do tend to think they got a perfect storm in the last quarter, with their marketing failure probably really contributing. I don't know about you, but I saw about zero ads for these guys.

        What is it about advertising for SCSS? A few years ago they win awards for their ads, and now they can't figure out how to market this.

        Some investors take the approach that one earnings miss by a company means you should run for the exits. Management of course is telling us that there was a blip in the quarter, that was not really reflective of their trend. So what do you do? It seems as though they have a story they are rolling out that makes sense, but I thought they did a #$%$-poor job of explaining what happened. And that just re-emphasizes for me the risk that they are not disclosing how screwed up they are vis-a-vis competition.

        The nice 25% drop in the stock price makes these decisions easier. I had a big position, but SCSS has mercifully reduced the decision about it as it now has significantly less risk and meaning relative to the portfolio. Thank you SCSS management!!

        I fear we will be sitting here in three months and hearing more BS about what one-off thing happened to screw the stock. But if you have invested in this, you have already accepted what management says, so how do you sell here, after a 25% drop, if they are telling us everything is fine. Lovely place to leave investors. SCSS management are not favorites right now.

 
SCSS
25.79+0.16(+0.62%)Aug 4 4:00 PMEDT