Ah, the fickle fairyland of Wall Street. Where else is a miss counted for such a bull's-eye? Yesterday, the world's No. 2 sports shoe joint, Reebok International
The $0.35 per share represents a 15% drop from the prior year quarter's $0.41. But if you consider the $0.11 per-share charge the company took for the purpose of retiring debt, earnings would have been 12% better than last year. Shareholders (and I'm one of them) will find little to cheer in the 1% decline in revenues -- after accounting for currency fluctuation -- but again, this was something everyone has been expecting.
Reebok clearly hasn't been bounding like smaller peer and Hidden Gems recommendation Saucony
The firm trades at a very nice discount to competitor Nike
As my Foolish jousting foe W.D. Crotty pointed out toward the end of last month, the firm's acquisition of The Hockey Company was only one of several earnings-enhancing moves made since last quarter's lackluster results.
And the firm knows how to tap into celebrity. Its retro and urban-themed shoes are growing steadily, with the 20% notch-up at classic dwarfed by the monstrous, 350% improvement with the Rbk line.
Priced not far from their 52-week low, Reebok shares are clearly off most investors' radar. But given the firm's strong balance sheet; conservative, profit-friendly management; and prospects for unanticipated growth, this looks like one of those rare chances to get a good company at a great price.