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Sport Chalet AŞ Message Board

  • johnheiderscheit johnheiderscheit Aug 22, 2006 10:42 AM Flag

    This Seems Cheap

    Why does this stock stay permanently cheap? Do folks not trust new management.

    Some of the metrics scream cheap -- EV/EBITA of 4.5, PE of maybe 12, P/S of .31. The stock would have to double to have the same multiple as Dick's.

    Any theories as to why this thing never moves? Why don't some private equity guys buy it up. You could pay $11 for the stock and still not have to put in any equity if you levered up the balance sheet.


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    • Form 4 filing on 10/6. Tim Anderson is finished selling. Whose next or are they done is the $64,000 question??


    • As of this evening...New Form 4 Filing: Tim Anderson down to 2529 SHCHA and 1623 SPCHB. Will be interesting to see how stock will react once done???


    • If the volume today in SPCHB is Tim Anderson, than its safe to say that the insider selling in Sports Chalet is over. The low lying fruit has been picked. We will see when the Form 4 is filed.


    • OK, I see your point, but I still think there is eventual value in voting rights. I guess if SPCH remains in insiders hands, we all wait until the buyout both groups of shares would be (equally?) valuable. I'm still uncomfortable with A and B shares, however. I'm a simple person who can easily understand 1 share of common and one vote. Anything more involved is worrisome.

    • The voting rights is not a issue since insiders have 50% + of the total voting rights

      The A shares are more liquid because insiders own most of the B shares and they don't trade. In addition there are 7 X more A shares outstanding than B shares.

      A buyer should be indifferent and buy whichever shares are cheapest at the time. I just wonder when it is time to sell if it would be harder to move a sizable amount of B shares since most of the activity people are use to seeing is in the A shares.

    • Thanks for the great info. You are obviously wired into what is going on. But still, one more question.

      Why do you say the A shares are better if they have only 5% of the voting rights of the B shares? Wouldn't I want more voting rights? Why are the B shares more illiquid in your opinion?

      Thanks again!

    • To answer your questions:

      The CEO & CFO had to sell their A shares to have cash to pay the taxes on the gift of shares from the founder Norbert Olberz.

      The only difference between the A shares and B shares is voting rights A = 1/20th per share and B = 1 per share.

      I prefer the A shares since they will have much greater liquidity.

      The CEO & CFO are keeping the B shares over the A shares so the have 45% of the voting shares.

      The recapitalization provided 3 things:

      Increased liquidity (twice as many shares outstanding)
      Better distribution of voting rights
      Tied two key excutives, CEO & CFO, with shareholders for the long term

    • Thanks for the comprehensive update. But why are they selling the A shares and keeping their B shares? I'll be honest, I lost some interest in investing in this company when they split into A and B shares as I didn't fully understand the difference between the two (other than voting rights). The A and B shares seem to move in lockstep, so what is the advantage to owning one over the other? There must be a reason Levra et. al. are keeping the B shares.

    • As of 9/15/06 the Chairman and CEO Craig Levra has 0 "A" shares left and 762,184 "B" shares, the "B" shares he will not be selling. The only insidered who may still need to sell some more "A" shares is the CFO but it should not be much. The stock is cheap and now that the market cap is over $100 million many micro cap mutual funds can buy (many micro and small cap mutual funds wouldn't buy stock in companies with less than $100 to $250 million market cap).

    • Do you know why all the selling and volume in SPCH currently? Why do you think this selling is just about over? I picked up some more shares based on the huge (for SPCH) volume and upward price pressure. So far so good on that.

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