K-Swiss, Inc. (NASDAQ:KSWS)

CAPS Rating: 1 out of 5

The Company designs, develops and markets an array of athletic footwear for sports use, fitness activities and casual wear under the K Swiss brand. Also designs and manufactures footwear under the Royal Elastics brand.


Player Avatar bofors (< 20) Submitted: 10/7/2010 3:20:52 PM : Underperform Start Price: $12.63 KSWS Score: +141.45

This is a brief outline of how and why I selected KSWS to underperform:

(1) KSWS has maintained a ceiling in the $13 to $14 range since April and had a celling about $11 during 2009.

(2) KSWS has traded below $11 every month for almost the last two years expect September 2010, and it is likely shortable at $12.50 now.

(3) KSWS's revenues are down some 13% and future orders are down some 9% year over year for the last quarter.

(4) KSWS's lost some 50% more money year over year for the last quarter.

(5) KSWS's attempts to turn itself around with "K-Swiss Orange County" and the "Kenny Powers" TUBES™ campaign look pathetic and weak. Moreover, with the later, KSWS makes a mockery of itself.

(6) KSWS has already written off 2010 and hoping some results might materialize in 2011 or later.

(7) KSWS has always been a small, weak, trendy brand and it was forced into the mainstream without a solid base.

(8) KSWS's TUBES™ seem to lack any real novelty or appeal to the moronic youth market.

(9) One of three KSWS contract manufacturers ceased operations in April and KSWS has had to get temporary capacity elsewhere.

In short, KSWS is a joke and has no expectation of making money for about year or perhaps longer. Before it has another profitable episode, it is highly likely that KSWS will drop below $10.

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