December 3, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Deckers Outdoor (NASDAQ: DECK ) climbed 11% today after Sterne Agee upgraded the footwear specialist from neutral to buy.
So what: Along with the upgrade, Stern Agee planted a price target of $65 on the stock, representing a whopping 70% worth of upside to Friday's close. Deckers shares have been battered over the past year on weak sales and spiking sheepskin costs for its Ugg boots, but the Wall Street analyst cited improved offerings as a potent catalyst for a turnaround.
Now what: Don't let today's pop prevent you from looking into Deckers. While Sterne Agee admitted that Deckers' sales and margins will remain under pressure in the short term, steadily improving brand positioning will likely lead to significant margin recovery in the second half of 2013. When you couple that improved outlook with its still-paltry price multiples and rock-solid balance sheet, Deckers seems like a particularly solid bargain opportunity.
Interested in more info onDeckers?Add it to your watchlist.