With a high profit margin and no debt, footwear manufacturer Deckers Outdoor
With a total of six brands in its niche portfolio -- including Ugg and, most recently, Sanuk -- the company has garnered a lot of attention from investors lately. Check out these stats on the company, then read on to find out why it might be the perfect fit for your portfolio.
| 52-Week High | $118.90 |
| 52-Week Low | $47.01 |
| Market Cap | $1.85 billion |
| Price/Earnings Ratio | 10.03 |
| CAPS Rating (out of 5) | *** |
Source: Yahoo! Finance.
1. Strong brands
Each of Deckers' brands caters to a specific and discerning niche market. The Teva brand appeals to adventurous outdoorsy types, for example, while Sanuk's customers are more into the surf and skate scene.
The company makes sure that there is little to no overlap between its brands, offering ultimate diversification within the specialty footwear market, where brand loyalty can be pretty fierce. And that strategy must be working, since the company's sales have grown at a compound annual growth rate of 32% since 2002.
2. Strong financials
While the company's stock price has been volatile, its financials have not. Investors have sent the stock to the moon and back, but Deckers has been consistently growing its sales while maintaining zero debt -- something its competitors definitely can't boast. The bottom line has dipped a little recently, but the company also had a blowout holiday quarter.
|
Company |
Debt-to-equity ratio |
|---|---|
| Deckers Outdoor | N/A |
|
Nike |
3.21 |
|
Wolverine World Wide |
3.47 |
Source: Yahoo! Finance.
Even though the company missed guidance for the first quarter, profits still increased 10.5% compared to 2011. That definitely beats Wolverine's recent 13% year-over-year loss, and even Nike's 10% gain. Granted, Deckers has seen a spike in inventory recently. However, with the company's margins, it could likely discount to move products and still remain profitable.
3. Currently trading at 52-week low
Because of the company's lower-than-expected earnings, though, Deckers is currently trading at the lowest price the stock has seen in a year. This could make now the perfect time for investors to get in.
But if you still aren't sold, then perhaps you should check out The Motley Fool's Top Stock for 2012. This international retailer inspired our analysts to put everything you need to know in an easy-to-read free report -- just click here to read it now.
