What a stock. This company generated almost $250m in free cash from operations. That is astounding, considering it's mkt cap. It's a pity that management has a terrible propensity to enrich themselves.. $22.5 million in salaries to Mr. Hilfiger and Horowitz is a bit much. However, this company will trade above 10 again. Can anyone show me a global business for $600m at less than 5 times earnings, equipped with a global franchise that basically pukes up free cash ? I would love to know.
Great post. However, I want to point out one thing. A company's total market cap is the market value of its stock (no. of shares X stock price) plus its debt. That would make TOM's total market cap about $1.2 billion because you also must add the debt. On the other hand, one can argue that because they have almost enough money to pay off the debt TOM, could reduce the market cap to about $650 to $700 million by using the cash to retire the debt. When someone buys a public company it does come with the bank account too.
tbeirnes made a serious misstatement. He said that total market cap is the market cap of the stock plus the debt. This is crazy and wrong. It is stock only! For example, let's say a 100 million dollar (stock price) company has no debt. Then they borrow 10 million dollars and use it to buy some equipment. The stock price doesn't move. The 10 million in debt is canceled by the new assets. The market cap of the company certainly doesn't jump up 10 percent for this!