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Deckers Outdoor Corp. Message Board

  • johndoolittle46 johndoolittle46 Apr 27, 2013 2:15 PM Flag

    managements conservatism and market "reaction"

    Part of investing in the market is asking yourself "what are the catalysts to make x stock go up or down"? What actions ccan be taken by management to TAKE ADVANTAGE when the market incorrectly values your comany by at least a 3rd?
    What happens despite stock for selling at minimum 1/3rd of its REAL FUTURE VALUE it goes lower(like DECK yesterday), what can be done to make it into a fotunate oppurtunity?

    Well, we know Deckers produced 250M cash and 128M in earnings in the second year of higher sheepskin costs(which will not be lower for 2013 along with UGG PURE). So we know that in about 240 days from now(the end of the year 2013 and 4Q) Deckers should have AT THE VERY LEAST 200M in cash on top of the 60 already in the bank). We also know that more than likely the 79M authorized for buyback could reasonably be assumed is going to be used up in the next 240 days. So cash position at minimum seems to likely be 260M, no debt, and a 300M credit facility. So if the stock is still sitting here at this level or lower, management WILL BE INCENTIVIZED to do something to benefit us shareholders.

    The obvious is another 200M or so buyback using straight up cashj. The less obvious would be to initiate a dividend or Special DIVIDEND that could amount to $6 share if management wanted to reward those who have invested patiently these last 18 months which will end up being 24 months by then.

    What can also hapen in the next 240 days can be a potential buyout or a big investment made by an Icahn type of investor Either way, there is no arguement about the POTENTIAL fortuitous events that can happen over the next 240 days. Nothing can happen as well and cash could end up sitting in the bank and be saved for a potential aquisition(though I personally see nothing really worth aquiring at this time and Deckers has its innovative team doing a very good job behind the UGG brand as well as the others on hand).



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