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Cabela's Inc. (CAB): Zacks Rank Buy

Cabela's, Inc. (CAB) is on a roll. New store openings and a strong brand are pushing shares of this Zacks #1 Rank (Strong Buy) into new territory.

Cabela's is a specialty retailer of hunting, fishing, camping and outdoor merchandise. You may know it from its big log cabin stores. It operates 33 stores in the United States and 2 in Canada. The company also has a large mail order and Internet business.

Cabela's also issues Cabela's CLUB Visa credit card, which is its primary customer loyalty program. It is operated through a wholly-owned subsidiary, World's Foremost Bank.

New Store Openings Are Big Events

Cabela's is more than a retailer, it is a shopping experience. Since Cabela's has such few stores, a store opening is a huge event.

On Mar 15, the company opened its 35th store in Wichita with an opening day crowd that some in the press estimated at 10,000 to 15,000.

The in-store restaurant serves wild boar, among other things. It also has a Gun Library and a Bargain Cave feature.

On Apr 19, Cabela's will open its second store in Washington state.

More New Stores Announced

On Feb 16, Cabela's announced that it planned to open stores in Ohio, Michigan, Kentucky and Washington in the spring of 2013. They would range from 80,000 to 88,000 square feet which is the average Cabela store size. The Ohio store would be the first in the state.

The company said new store locations were a result of the amount of demand from the web site and from the catalog.

The company also said it would open a new, smaller format called 'outpost' in Washington state. It will be a 40,000-square-foot store in a suburb of Yakima. It's expected to open in the fall.

The new stores will increase retail square footage by about 10%.

Zacks Consensus Estimates for 2012 Continue to Rise

The analysts are bullish about 2012 due to store expansion and the hot firearms market.

One estimate out of 10 has been revised higher in just the last week, pushing up the Zacks Consensus to $2.46 from $2.45 per share.

That is earnings growth of 16.1% as the company made only $2.12 last year.

Strong Momentum

Shares continue to hit 5-year highs as stocks rallied in the first quarter of 2012.

But this isn't a stock that is trading with nose bleed P/E ratios. In fact, it is downright affordable with a forward P/E of just 15.2.

Cabela's is a momentum stock with strong fundamentals. Look for its first quarter results expected on Apr 26.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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