The Bon-Ton Stores, Inc. (BONT)

This call is made in honor of ultralong. I have been working on macoroni necklaces and other prized paper plate artwork since he called to task on my ETM Entercom upthumb. Please tell me where to mail them to, the mice are eyeing them....

Bon-Ton will some day leave a bad taste in bagholders mouths. Less bad when you're bleeding money will some day not be good enough. In the short run, it can be said that a pig that jumps off a cliff will fly for a short period of time. It just depends on how high the cliff.

Net Earnings, Negative, Highly Speculative.

Zacks Rank 3-Hold, Recommend Neutral, Industry Rank 34 / 217, Target 13.00, Avg target of 2 analysts 3.00

Like mrindependent I too am following Portefeuille12. Bon-Ton's stock price is up dramatically without much rationale. This unfortunate department store retailer needs to pay down approximately $850 million in debt. Unfortunately 5 year return on equity is negative 4%. In the last 5 years, Bon-Ton's best performance was a 46 million profit. Compare that to its debt and reach your own conclusions. Current p/bv ratio is 4.2 and debt/equity ratio is a stratosphric 17. Stockscouter rating is 4.

Following Portefeuille12. Bon-Ton's stock price is up dramatically without much rationale. This unfortunate department store retailer needs to pay down approximately $850 million in debt. Unfortunately 5 year return on equity is negative 4%. In the last 5 years, Bon-Ton's best performance was a 46 million profit. Compare that to its debt and reach your own conclusions. Current p/bv ratio is 4.2 and debt/equity ratio is a stratosphric 17. Stockscouter rating is 4.

Ultra

Proof that you can never underestimate the power of stupid people in large groups! I have no choice but to come back with another short as Bon Ton amazes and wow's the crowd with more losses!!!!

Imagine this... you're a freshman in high school. You meet a bully. Every day he whoops your butt and takes your lunch money. Then one day you fight back...you go home with a black eye but this time you only lost half your lunch money. Well guess what, you still lost money!!! That's Bon Ton for you. I want to know how they work their magic so well as to schmooze over this huge yearly losses to analysts and get 100% moves out of their stock.

For reference, here is my original pitch...

"This is the most retarded retailer I have just about ever seen. Bon Ton has taken a page right out of Seinfeld where apparently less is more and a bizarro world really can exist.

Bon Ton shot up like a rocket over the last month, nearly 200% in that time span on news that instead of a loss of $3.90 for the year, it will only be in the $2.50-3.00 range. Oh whooptie doo, break out the champagne. What is driving this pseudo-growth? But of course the same old story of cost cutting!

Same store sales down "only" 5%???? Well Partaaaaayyyy time, lets shoot the stock up another 20%! Same store sales down 8.2% since the year began... who cares, its party time! 1.14 BILLION dollars in debt with 15 million left in cash..... meaningless..its party time!

If we had an FDIC for the retail sector, they'd have been shut down 12 months ago. I need a stick I can shake at it so it dies...."

UltraLong

$1.1BB in debt, almost no cash, and up 13% on slightly improved quarterly figures? Wow...

Setting 52 week highs, short this trash stock.

2008 EPS -2.43
2009 EPS -.52
2010 EPS -2.79

Eventually this stock is going to have to come back down to earth and trade lower, the price can't keep going up, when earnings are negative

1000% up on a company with negative EPS - how do you find these before they pop?

I have purchased BONT :-

http://finance.yahoo.com/q?s=bont&.yficrumb=yIQAwlz5SoW

Industry: retail (dept & discount)
EPS = -10.79
EPS EST 1yr = na 2yr = na
EPS EST Q1 = na Q2 = na
PE = na Industry 19.1
PB = 3.22 Industry 1.8
PS = 0.06 Industry 0.4
P/CF = na industry 9.4
P/FCF = 3.4 Industry 14.3
Yield 1.8 Industry 0.0
Gross profit margin = 37.2 Industry 34.4
Operating margin = 0.5 Industry -0.6
Net Profit Margin = -5.9 Industry -0.1
ROA = -9.5 Industry -0.1
ROE = -128.6 Industry 0.7
Insider ownership = 49.4
Greenblatt ROC = 1.24
Greenblatt Earnings Yield = 1.10
PosFCF generic % free cash flow yield 29.50%***
Passes 14 of 17 of Mike Klein's metrics
MaxPrice = 248.00 Discount 96%**
Metrics from qtr ending 8/01/2009
Caps rank 1
http://caps.fool.com/Ticker/BONT.aspx
MC score 273

All good enough for my money. I only suggest stocks that I own !

(See posts 388/584/665/760/1051/1807/2213/3546/3755/4046/4208/4225/4345/4573/4818/5241/5242/5310/5461/5579/
5169/7651 on 'Investment Analysis Clubs / Dynamic Value Investing ' board for extra due diligence applied ). **MaxPrice is a generic version of Mike Klein's Maxprice and ROC and Earnings yields are generic versions of Greenblatt's metrics. *** PosFCF generic % free cash flow yield taken from AAII and posts 5248 and 5253

See 'Investment Analysis Clubs / Dynamic Value Investing' board and my CAPS profile for further excellent companies selling at a discount to Maxprice with excellent current metrics. CAPS only shows my selections over 100Mill (unfortunately due to restricted lower market cap applied by MF CAPS).

As stated on the 'Investment Analysis Clubs /Dynamic Value Investing' board my aim is to obtain up to 50% returns p.a. as Buffett stated he could obtain (3 times) recently. A very difficult task but you can follow along with my buys and sells on my CAPS page, where I put my money where my mouth is . If I perform well I hope you can benefit. If not , feel free to ignore my comments. CAPS allows each and everyone of us to be clinically judged on our stock picking abilities over the LONG TERM.

Please always do your own due diligence before investing.

Manucastle :o)

lots of debt, has run, run run but now it is time to revert to the mean

Well, this has gotten off to a great start!

HT UL

Does not have the numbers to support this kind of run up.

the high volatiliy (beta) of these stocks & their tremendous run up in this bull market will mean a much larger fall than the S&P 500 when the market falls.
Due to their volatile nature, these stocks provide a great opportunity to score lots of points for a redthumb pick.
SHORT:cot,ogxi,lnet,mtg,pmi,smrt,rdn,immu,sva,nano,smp,bont,ymi,stec,trgt,lad

They are going bankrupt - count on it!!

Good Mdse, I just like the stock

This is a bad company. Do I want to own a part of this business at any price? Certainly not. You're buying debt and a terrible business model. A recession will not be kind to this company.

A pitch stolen from a friend:

The Bon-Ton carves out and maintains a niche in smaller secondary markets by

offering a higher proportion of better to moderate merchandise in an upscale

environment with superior customer service. Moderate-price competitors in these

markets generally offer a more limited selection of quality brands or do not

carry the same better brands as The Bon-Ton.

Two things are wrong here:

-secondary markets

-premium pricing

This company sounds ripe for a credit crunch hammer. If people get poorer, they are going to get poorer in the secondary markets first

which means the upscale stuff in those secondary markets will be what eats it first.

Also look at their website here http://www.bonton.com. Seeing 30%-50% off is a sign of desperation. That's something I see in retail stores right before they get boarded up.

And if you wanted a comfort blanket:

The department store operator reported a loss of $19.4 million, or $1.17 per share, compared with a loss of $10.9 million, or 66 cents per share, a year ago.

They have 1.27 b in debt. There is no such thing as a cheap company that is losing your money.