The Buckle, Inc. (NYSE:BKE)

CAPS Rating: 4 out of 5

The Company is a retailer of medium to better-priced casual apparel, footwear and accessories for fashion conscious young men and women.

Recs

9
Player Avatar TMF1000 (99.70) Submitted: 8/10/2011 5:33:41 PM : Outperform Start Price: $29.99 BKE Score: -16.74

I reupped BKE at a Caps price of $37.63.

The last two months they reported strong same store sales. June same store sales were up 10.8%. Same store sales were up 6.8% in July. This should make the next quarter report a good one. The 6.8% was under what analysts estimated, but the recent fall in the markets have brought BKE way too low in my opinion. Their $0.80 dividend gives them a yield of 2.13% which looks even better as the government declared they will keep interest rates low through 2013.

The last earings report was a good one in my opinion too -

The stock price fell about 12% on what I feel was a good earnings report. Revenues were up 11.8%. Earnings were up 10.8%. They pay an annual dividend of $0.80, but that is only part of the dividend story. They paid a special dividend on December 1, 2010 of $2.50. They have $226 million in cash and no debt. They paid a $3.00 special dividend in 2008 and a $2.00 special dividend in 2009.

They produced $125 million in cash flow for 2010. So they could continue to pay out special dividends without touching their cash in the bank.

If earnings were down or revenues down I might be concerned, but they are up in a non-holiday quarter. So I am happy to be a shareholder and if investors don't bid this one back up in the next two days I will establish a trading position. The PE Ratio presently is 14 based on a share price of 41.57 (caps addition price). I also want to mention that same stores sales were up 8.1%. I consider the drop to be irrational and the present value a good one.

Report this Post 2 Replies
Member Avatar Bamafan68 (98.45) Submitted: 8/30/2011 4:00:23 PM
Recs: 1

Tom,

First off, thank you for all of the great teaching you provide on here. I know you have been following BKE for a while. I've only had it on my radar and in my portfolio for 1-2 years. In both 2011 and 2010, BKE somewhat irrationally, to my mind, in August. Has this been a long term trend with BKE? If so, is this something you'd take advantage of with your "trading position?"

Thanks!

Member Avatar TMF1000 (99.70) Submitted: 9/13/2011 11:21:12 AM
Recs: 2

Hi Bamafan68,

I didn't understand the question. BKE price does often give us a chance post holiday to get them cheaper. Is that what you meant? I don't know if its August every year, but almost every year, the price drops for many of my favorite retail stocks. When they go down to the low point of their value ranges I tend to buy a basket of them for a holiday play. I use the cash flow to expand my portfolio. I own many retailers so that I do watch them each year. Not all of them will provide a good opportunity but some will. This year was the longest I had to wait. I just couldn't find a good drop in any of my favorites. Last year it was NWY. But generally every year, during the post holiday season there are good opportunities in retail.

Featured Broker Partners


Advertisement