When you look at the last 15 years with BKE you can pick periods where we've seen relatively stagnant prices for approximately a couple years. We have kind of seen that looking back from now, but at the same time earnings have gone up a lot. Now we are seeing P/E at 12.x times earnings, so there is technically plenty of substance for prices to perform going foreward. Do you think we will see the breakthrough this year and have a year or two of good price action?
That's a tough call, and why I think in this market that it makes sense to take a core position in good stocks and trade accordingly in the same stock. Right now, and this is just an opinion, I think the market is worried about a slowdown in retail. With BKE you throw in the worry that margin expansion cannot continue forever. As someone stated earlier it might make sense to trade carefully now and look to invest based upon the expected dividend in Oct.
I always worry about retail, but both BKE and ARO have pristine balance sheets. Right now I have no position in BKE. The gamble is that it runs away from me, but I do think there is a greater chance that I get to buy it at 31 - 32. Time will tell.
That would be nice to see. It's a little disappointing to see our price action following a dog like ANF. You know they could probably make a profit if they weren't paying the CEO 4 million to not fly as much lol.