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Rocky Brands, Inc. Message Board

  • smaycs4 smaycs4 Jul 30, 2013 8:39 PM Flag

    My low end estimate= $1.80 for the year

    Going with $1.45 for the 2nd half,.85 for the 3rd quarter (versus 72 cents last year and 70 cents in 2011) and 60 cents for the 4th quarter versus 34 cents last year and 53 cents in 2011 (Before pension charge)

    With good (Bad ?) weater, we could be looking at $2.00-2.25 or even more.

    A low 12 mutiple on $1.80=$21.60
    12 on $2.00=$24.00
    12 on $2.25=$27.00

    And what if RCKY gets awarded a 15 multiple ?

    You're looking at $27.00-$30.00-$33.75.

    So there is a lot of potential upside left.
    Of course, the nosebleed levels require cooperative weather and a trailing 15 multiple.

    And if we get to the mid $20s to $30s, thats when the canslimmers take over. And theres no telling how much higher those buys take it.

    RCKY is and has been my largest single positiion.

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    • Three reasons for RCKY going higher.

      1) EPS: My estimate is $1.62. I didn't go forensic simply took from the CC and made quick math (without considering opex leverage). There was $8 millions revenue shown on last year's Q3 not going to repeat this year. Thomson has a undisclosed contributor (suppose to be the usual analyst) estimating only $1.42 bumping up 2c. I think anyone with a math can figure out way higher than that number.

      2) PE multiple expansion: The key is to sell more fashionable boots. Durango sold $25 millions last year. Look like they could expand 40% this year. So we could expect fashion boot going up to 15% of total sales.

      3) Recognition of tangible book value. Similar to RCKY, SCVL and COLM also has strong tangible book value. In last 6 months, they moved up stronger than the peers despite lack-luster earnings.

      After you add these three factors up, $25-30 is really the fair value for the stock.

      • 1 Reply to floppy_6
      • BTW, this market starts to find all sort of reasons to move the stock up especially via multiple expansion. Two of my low-PE stocks, IGTE and PRFT all have improvement but not proportional to the percentage of the stock movement. Investors magnified the improvement and reward with multiple expansion. The perception changes from a valued stock to a growth stock. Then bingo. Rocky will have over 15% revenue growth this year - I don't even think Ralph Lauren can claim that.

10.30-0.30(-2.83%)Oct 24 4:00 PMEDT