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Deckers Outdoor Corp. Message Board

  • johndoolittle46 johndoolittle46 May 26, 2013 12:54 PM Flag

    Why I would pay a 30 p/e for this company

    CASH! 40-50% of a stocks returns is based on future dividends(should be obvious).

    The whole point of investing in a company is in expectation of getting more cash from it in the future than the amount invested(see warren buffet).

    The only way to see future cash is to stay invested despite massive corrections(see charlie munger and warren buffet).

    This company is making more than 250M in cash in a hard year and 128M in earnings. At current valuation, cash is being produced to the tune of 15% or so. At a p/e of 30, double the current valuation, company would still be producing 7.5% of valuation in cash/year which compared to the current 30 year bond rate of 3.17% makes the stock still dirt cheap at even DOUBLE the current p/e.

    This is investing gentlemen. The hardest part is being patient and remaining solvent.


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