Yeah, if I owned it long term late Dec CATO would likely have been a part of my "house cleaning" and I likely would have bought it back below 27 (as I have). Not entirely a great strategy since I did sell KMB and PG at year end (though I did deploy that money nicely elsewhere).
I've had CATO on my watch list since December and I started a position this month. My thinking is this is a well run, no debt company that has grown earnings for many years including through the deep recession. They have grown their dividend for 10 years at a rate of 10%/year and even though they didn't increase the dividend during the recession, they caught it up quickly. Continuing, I think since they prepaid the 2013 dividend along with the $1 extra, they are not screening well for dividend payers this year and that is cause for the stock price to drop around $3. And, since they had a bad quarter, this is good for another $3 drop down to where they are now. Another bad quarter might take them down to $20, but I think this company has a long history of running their business well and I expect they should recover to above $30 by mid-2014 and deliver a near 5% yield on todays cost at that time (maybe closer to 5.5% after a nice 2014 increase).
Anyone else think CLX is more than a little ahead of itself here? Highest PE and lowest yield in years. A couple of decent qtrs, but should head back to the mean shortly (unless Icahn is putting a new offer on the table).