is short term for the most part... by short term I mean the last few months and the next few months.... why? simple.... deck is going to be losing a buck when they report. but even if they "only" lose 87 cents or 79 cents it is still a loss and the stock is just not going to be going up in the near term.... the best strategy would be to simply hold and sell covered calls given this scenario through the fall...
now the model for deck should be vfc -- notwithstanding the fact that vfc is dominantly north face (a winter months brand similar to uggs) they still make a dollar a share in the summer.. sure that gets bumped up to almost 4 bucks in the winter... but they figured out how to make a profit in the summer... deck needs to learn how to do that as well.
bottom line is that deck is a good longer term play.... yes undervalued.... with room to move up long term... just do not think it is going to happen any time soon. for the record, i do own some deck and would recommend waiting till after earnings (or more accurately lack of earnings) to buy more...
having said that bit of bleakness, i do not think that deck is a good short-- it would in fact be a dangerous short as there is always the possibility of a significant upside buyout --
i reiterate... deck is a good long term play.... they make a great winter product which is hugely popular... but they have not figured out how to make a profit in the summer... better wintercentric companies like vfc have..... deck needs to try and become more like vfc with earnings all four quarters....
with the upcoming quarterly loss expected to be around a dollar, even a small beat is not going to help deck much...
short term..... sideways trading in the low fifties is the best of what can be hoped for here... given the sideways trading expected, selling covered calls is they way to go
United, do as you please. Youhe same game with Under Armour. If it works for you, so be it but I think you got burned too many times to count.
What you are not getting is nobody can predict anything in the short term. This company has plenty of new innovative products on the website now for fall. They have an all year round slipper line. This company is opening up 130 more stores the next 30 months not to just sell UGG boots but to sell plenty of different styles for all kinds of weather.
As for management, you could not find a more engaged/invested management than this one if you TRIED. Insiders have not done anything really for 20 months now. THERE IS A TREMENDOUS REASON. This company is worth at least 5B at PRESENT for its cash flow and potentail.
But you can try to make money with aggressiver call selling and I will just do it the same way I did Paitence.
There is no problem with deck. The losing buck this quarter is yesterdays news. Going foward, companys ugg line is expanding beyond winter. The whole.point of the concept stores is to be able to showcase our broad range of products.
By the time the concept stores bring the meaningful impact for quarters 2 and 3, 50/share will be long gone. MONEY Iis made by being predictive. With under armour, we made money because we saw 3 years ahead what everyone sees now.
Today, nobody sees thebugg stores all over the place in every citt. Three years drom now there will be 130 more stores.
Actually, the problem is that they are going to lose around a buck this quarter. Does not matter that this is known. It is what has held the stock back the last several weeks and it is what will continue to hold the stock back in the weeks ahead. I am not saying that deck is a bad investment long term. I actually think it is a decent long term play. I am just saying nothing good is going to be happening any time before earnings and after the loss even if they "beat", I expect the stock to take a hit and then I expect the stock will languish in a wait and see mode. In the meantime the best strategy seems to be to simply sell covered calls and collect the premium.