When you look at hundreds of stocks every month, you quickly notice there are some companies that just don't seem to care whether or not individual investors own their shares. Such, I would presume, is the case with Burlington Coat Factory
So what do we know about the recently completed fiscal second quarter? Sales were up about 8% and comp-store sales were up a bit more than 5%. That's not bad, and the news that December comps were up 7.5% is better still. On the earnings front, the company reported that net income grew 9%.
And that's about it, folks. Because I listened to the company's conference call, I know that same-store inventories were well under control (up about 0.6%) and that the gross margin slipped a bit due to lower initial markups. But that's about it. Free cash flow? Dunno. Where are the areas of strength or weakness? Beats me.
But is this company worth the trouble? After all, there are plenty of good companies out there whose info can also be tough to come by. Even great companies like Roche and BerkshireHathaway
Well, in the case of Burlington, there's a pretty mediocre return on capital, and the margins are nothing special. Valuation doesn't look too bad on a relative basis -- but then, why should a slow-growing company with low returns on capital carry a premium valuation?
No, my friends, I don't see the value here to merit putting up with a below-average level of disclosure. Now, perhaps this is all a misunderstanding and the company really does care about its co-owners (that's what shareholders are), but the proof is in the pudding . or, in this case, in the amount of information offered up with an earnings release.
Sure, there might be more value here for patient investors -- particularly if the company does, in fact, act on its "exploration of strategic alternatives" and pursue a sale of the business -- but why settle when there are thousands of other stocks to pick and other great retailers like Chico's
For more Foolishness on retailing, put these in your cart:
- Foolish Forecast: Burlington Undresses
- Christopher & Banks' Marginal Improvement
- Dress Barn Looks Dazzling
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).