Company's earnings will be growing after 2012. By 2013 profits will be increasing by more than 20+% YOY. This stock is getting dumped for bs reasons. Use a clear head. It is not good to compare a stock to where it was in the past. Yes, Deckers was at 119, today it sits at 57. It is now off more than 50% for profits that are only slightly off and that will continue to grow in 2013 YOY again as revenues increased 20+% this quarter again.
Stock is literally on the bargain table. All the longs holding from 118 who used margin are now already dead. Those who continue to average down will make money in the next 24 months. This is a company with revenues still growing, not dying. The costs of business can;t outpace the revenue growth forever. Zohar Ziv himself said on the call that costs have already pulled back off the all-time high.
Patience. The game is long term not short term. Go to Las Vegas for the latter, not the stock market. Short term is nothing in the markets but gambling. It is not investing.
My view of the classis is that it is in fine condition. I work in New York and like the record sales UGG had in the 4th quarter indicated, every woman hd a pair of these on this winter. Despite the warm winter, plenty of women were wearing the brand this winter. This brand is not dead, is still very much in style, and the warm weather just impacted those not as fanatical from buying it this year as why buy a pair of shoes that you won;t wear that much that season due to the weather; just wait until next season when it would make sense due to the weather to do so. Get more bang for your bak. Makes perfect sense to me. But with the way women and kids were wearing Ugg this season, I am not worried in the least that this brand is fading.
Indian: Again, it is not the UGG brand that I have been addressing. It's a great brand, and it is doing well. The "elephant in the room" is just one style of UGG: the Classic. If the mania for the Classic is ending, the next year or two might have very disappointing earnings (to put the issue conservatively).
What I want to hear from someone is some kind of evidence that the Classic mania is alive and well.
No one; no one addresses the future of the Classic, yet it is the meat and potatoes of the UGG brand (for now, at least).
I am not a neophyte. I have owned DECK many years.
All that would matter if this market had anything to do with fundamentals or business in general. This market is nothing more than a casino. You have people betting on a company and their stock price loosing more so than you have people investing in the financial outlook and future of a business. Anyone who thinks the principals of Grahm or Buffet is applicable in todays market or that of the past 15 years is not thinking right. Good luck (that's all it takes...)!
veryreal and java, I'm not disagreeing with either of you. Veryreal, I am not ignoring the threat that lurks out there for UGG's(the "FAD" ends). But coming off one of the warmest winters on record and UGG STILL setting all-time high's in sales disproves the fallacy that UGG has peaked. The product itself is great. The girls/woman swear by it to the point that its a must have for the wardrobe. One girl in school has it and the other girl feels left out for not having it.
Veryreal, the arguement you present is that UGG MAY have peaked as a result of this past quarters results and the forecast for the next year. I just don;t see how that is possible when UGG is barely in china and other markets and international sales surged82% YOY last year.
The typical retail investor is being sold this story that the brand has peaked and is now on its way to die. But when an investor knows his facts, he knows otherwise. I will not be told what to think by the news forecaters who know nothing about investing(they read off a teleprompter for a living, CNBC losers(who also read off teleprompters for a living and just collect a paycheck), and my favorite CRAMER who actually loved this company at 109 5 months ago when he had th CEO on the show and now seems to not like the stock 5 months later when it sits 55% lower at 51.70. He's a buffoon. One must do their own homework.
Using the view that I'm not being open minded enough to view the threat that UGG faces, is like saying to the APPLE LONG investor he is not being open minded enough to realize that he is holding a company worth 550B for selling a phone, music player, etc that could be second rate technology in two years.
Bottom line, to me and the APPLE investor is the idea that yes there are threats, but one doesn;t buy a business based on the "potential" threats, but on what the hard numbers show. The hard numbers show for this company as I have stated repeatedly and I believe time will show that it is all that really matters, is that this company is forecasting to make 190M in profits this year, and more than 200M based on its 5 year outlook in 2013, 14, 15 and on. A lot rests on sheepskin prices more so than the growth of the brand as the brand is still growing by double digits.
Most investors are letting the drastic price affect their thinking, which is precisely why a lot of stocks fall this drastically in the short term; to create the trading/commisions that pays the brokerage fees as well as allow those who missed out on the run in the last two years to get in at the same prices before it starts running again in the next 5 years.
UGG has proven to not be a fad by surpassing 1B in sales last year. I understand net income will go down 10M this year and no that isn;t reat, but that is a one year hit. I would be scared if UGG wasn;t growing at all, which is not the problem as THAT would signify trouble. not a hit to net income, but a hit to growth in revenues.
Momentum Stocks erase massive values when sentiment turns against them. Why shorts sentiment is relevant - because just like DECK did not deserve $120 IMO, it was CNBC effect for runups & insiders unloaded at right time - same thing will happen on way down - DECK will be oversold. And then it will be buying opportunity. Its a funny satire but cost of sheep skin matters 2B+ on the street - because they need a reason :-)
Indian: Everything you say makes complete sense -- except, as I mentioned some weeks ago, you are not willing to face the primary threat facing DECK and (in my opinion) the primary reason is has plummeted: the fear that the UGG Classic boom is ending. The Classic accounts for a huge share of UGG earnings, and if this boom is ending, the other styles and brands will not be enough to keep the profit trend alive -- nor will cold weather and lower sheepskin costs.
Your only answer has been that you saw a lot of UGGs on the streets of New York, and that your sister says they're still popular at her college. That's not a very good body of data.
Because you are obviously quite competent in most respects, your refusal to face this possible problem unfortunately indicates that you are not willing to accept the validity of any possible threat to your theory that DECK is completely healthy and free of any obstacles to continued high profits. In other words, your analysis could benefit from a bit more balance between your many positives and any negatives such as the one I have raised.
JAVA, short iterest is not an indicator of anything to me. Funds short at various times for various reasons. I don;t understand how one can make the case that this stock deserved to erase more than 2.2B in value in the last 6 months from this companys because sheepskin costs rose temporaririly and net profits will take a 5% hit in the YOY.
It is just ridiculous as the brand is still growing, not declining. I can only make the same case so many times. This is time to average down shares(my average is currently 68.47) and to remain patient.
Interesting posts from you/ nothing wrong in having long term views.
* Short interest is high range of 25%, so I am not surprised to see lots of negative sentiments and posts
* UGG is in bad position in my view - one we have summer time here and 90% of top line of DECk comes from this line. So I am worried to wait it out for whole summer till next winter. Additional concerns over inventories, high cost etc.
* Overall stock market has been very strong so far this year. But if market turns south this summer for any correction, DECK won't rise
* Insiders sold before earning when stock was high & before earnings. Not an ethical behavior by insiders.
Besides good valuation, any other potential for uptick??
Not sure if there is hope for upswing besides good valuation and stocks past growth.
With recent fall, I think stock is not done falling - it will keep down slide till $47-$48 to find any support. This is effect of current bad quarter. If any more bad news comes out, stock could fall to $30 this year.
Short term - I am trying to get out of DECK about $55 in next week or so.