The market priced this company as if it were going out of business
when ll that happened was the main cost of the business, sheepskin, rose 80% over two years.
So now that we ALL know and can see every year(#1 searched item just 6 months ago) that this product is still very much in demand to the tune of 1.2B in sales/year, over 1B 2nd year in a row, the stock will now correct back to a higher pe as the company produces tremendous cash and the theory of this brand going down has been just down right wrong.
A sell-off due to sheepskin rising was warranted, but 75% correction in the short term was complete overkill.
For those who don't fully understand what I am trying to explain, take a second and watch the first Wall Street movie. There is a scene where Bud Fox is angry at Gordon Gekko because Gordon had pretended he wasn't going to buy out Bluestar and liquidate it for its raw cost of goods but that he would actually run bluestar.
Gordon then goes on to explain to Bud that what did he expect, this is what guys like him do. we don't create anything. Wealth isn't unlimited, it is simply TRANSFERRED from one person to the next. The everyman thinks we live in a democracy. He doesn't know why the cost of a safety pin is worth what it is. He is TOLD what it is and just buys into it, believing in the "free market".
This stock was brought down by anything but the "free market". There are big fish(goldman Sachs) in this market and then little people, and whether you like it or not, the BiG FiSH set the rice of the safety pin in the short term(in this case Deckers).
Goldman wanted in at a cheaper price. They or others shorted this to hell on temporary hiccup and rolled out bs excuses that this company was a fad from the likes of Sam osar and other idiots like Bill maurer on Seeking alpha catch on and believe what they are told and write articles with the negative bent.
But now its two years later, the company has bought back 221M worth of stock, balance sheet has 60M in cash on hand and just 10M in debt.
Management forecasting 7% growth, Goldman Sachs and insiders holding their shares.
But wealth has been transferred over the last 18 months by those who sold out instead of holding and Goldman Sachs has now profited more than 60% in the last year on the upside and likely the same on the downside before the bought in.
Wealth just gets transferred. They SET the price and know the numbers it takes to force the hand of the "little" guys to cough up their shares at bs prices,