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Deckers Outdoor Corp. Message Board

  • retailbaloon retailbaloon Mar 1, 2014 6:13 PM Flag

    if guidance was simply too conservative for the Street here then why

    did this sell off on nearly 9xaverage volume and finish down 12%?? I thought that the market was a forward discounting mechanism, however inefficient one may believe... why did this finish down if it's obvious that DECK brass were simply "low-balling" as some here suggest? Why talk the stock down if your first responsibilities are to the shareholders? They reaffirmed full year guidance, so why would a quarter of negative EPS matter in the long run if expenses are chalked up to opening new stores?

    only thoughtful answers please, no conjecture or cheerleading...

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    • Simply put, the market has investors and it has traders. Traders play the Qs...investors play on a LT outlook of the company''s success and growth. IMO, what you saw Friday was traders exiting the door and investors swooping in seeing a 12-16% discount on fair value. More than likely mgmt was also buying back some shares to sweeten the next EPS as well. Traders don't care about the year outlook - they want the here and now financials.

      I would be much more concerned as an investor if I saw insider transactions when this was at 85-90, because Akerlof (Yellen's husband) has already shown that C-series executives do not look out for the shareholder but for their own value - if you think they care about the shareholder over share price we can talk about a fair price for a bridge in SF that I would love to sell you. This is also the reason though that I dislike buybacks over dividends - they buy back shares only to reissue them as stock options to executives. It is a way to temporarily increase shareholder value but really increases executive incentives.

      My technique is slow an steady - the weekly options on this stock have an amazing premium and with volatility will stay in play. I can return 1-2% per week just playing the contracts as covered calls and have been for about 12 weeks now. If this dips again to 70, I will look to buy more to DCA down, but my best assumption is that they sandbagged the report and this will hang out between 70-85 over the next few months. The chart after each ER like this, which is 3 of the last 4, shows an immediate drop and then immediate rebound back to the original high. While history does not always repeat, it definitely often rhymes.

    • If you really have to ask these questions, then you shouldn't be in the market.

      Moves like this create opportunities for savvy investors and cause weak minded investors to panic. If this ever gets to the mid 60's again, load the hell up on leaps before the move to triple digits. Because it will be headed to triple digits via earnings momentum or a buyout going forward.

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