Too scripted and in obvious short-seller's control. Has been ever since they ganged-banged the chart-read, double-top at $100 Logic's pretty simple in their mind, "teen-tween-fad-fad-fad" and extenuating circumstances, like higher-sheepskin cost, and mild-to-warm Winters.
So, if you've been following this tale, every, EVERY, pop, has been controlled-down by the big short-lobby! I could list each spike-top that's been beat'in-down, but it's too rote to do so, and anyone who knows this stock, or has held it from higher levels, knows this to be the case....
So, one could have done pretty well, selling the opens and buying the closes, so to speak! That pattern still hasn't been broken, btw, and it is still in effect. Today's sell was north of $38, and the buy, provided it trades according to the "short-noose" pattern, will be a buy right before the close, somewhere toward or below $37
There are two three caveats to breaking this short-pattern currently affecting DECK, imo. One, is that a strong 52-week low and bounce off of, has been made. We're actually trading rather healthily off that low, so the short-pound-down is less dramatic than it was before we made that low. On the way to that low, we often free-falled, with seemingly little to no support.
Caveat number two, is good-numbers and too depressed valuations in the face of such a turn-around, with lower input cost and broadened new sales, and a work-down of old inventory! That could prove to be a catalyst for shaking-off the big shorts lobby here, imo. This would offer-up caveat number three, in a more attractive package....
Caveat number three is the "buy-out potential" this Co. presents. There are too many bigger players, that would/could like to take the helm, and sell to scale and wrap this life-style brand up into their portfolio. VF-Corp is prominent to mind, although I think they carry too much debt on their balance sheet to dole-out another $2-billion+ for such an acquisition. But there are a fair amount of other players that could, and would, make such a play for DECK, especially if 4th-quarter 2012 proves to show a "turn-around".
As we get closer to q4 results, things should get a bit more interesting. For now, the stock and company is saddled with +40%-short-interest, and that's colossal. Any time a Co. or stock has that much short-interest, it's indicative of big-big money betting against it, and it often dictates and determines the short-term direction of the stock; for instance, this "sell the top, buy the bottoms", with DECK, that has worked like clock-work way too predictably now, imo. VRA is another case-study of a stock "short-controlled", and I've followed that one a while too. In fact, on a personal level, I have been engaged in selling part of my position on these tops, and buying it back, often intra-day, to try and get a better average! Don't know how else to take advantage of the short-noose, other than, allowing it to get me a better average! It's a bit risky strategy, b/c this small-cap stock can spike up/down so fast..but it seems to be working more than it's not. Until the trend and pattern changes (i.e., until the short-lobby is thrown-off!), I will continue to try and take advantage of the over-powering short-depression of the shares.
Hoping for one of the caveats to hit soon, and mindful that all 3 could hit together, that is, 1) great, turn-around numbers and guidance 2) thus increasing the take-over appeal potential, while that 3) 28-bottom looks like a Grand Canyon in one's rear-view mirror!
PS: I do think the CEO and board, should consider the implications of this huge, short interest affecting/effecting their Co.; I think their greater concern is to "focus on the actual business at hand, and the stock will take care of itself". We'll see if this strategy works, and the quarterly numbers must support such a plan of action. If we get good numbers and the shorts stick, then that's really time to do such things as "issue a dividend or special one-time dividend", partner with someone in a big way, or openly shop the brand around to potential suitors---all in an effort to deal with the BIG SHORTS! IMO!
Agree with the special dividend plan but not right now. One should use this oppurtunity to accumulate shares of a great brand/product. As I stated the other day, the margin of safety is put n at this price.
Profits would be at minimum 50% higher than where they currenly are had sheepskin remained the same for the last two years. The UGG brand despiteits forecast being lowered from double digits is expected to grow 6% this year. I believe this is ANGEL underestimating on purpose as he estimated this growth projecton in 2007 or 2008(cannot recall exact year) and it came out to more than 20% growth.
Company is a cash machine. In the next 10 years, it will have generated based on income and sales staying stagnant over 700M in cash. That is more than 50% of our current share price. Either we get is a dividend or the company uses it for aquisitions to bolster growth.
But this brand has hit bottom. Might test lows once more or not but margin of safety is huge which is why we jumped 25% off the lows.
Wonder why the Co. hasn't gotten a bid already? Seems like indications would have already been present enough for a suitor (indicating strong brand appeal and sales), that if they "didn't jump soon", DECK's q4 numbers and guidance could/would make them a much more expensive proposition!????