By RJ Towner
Collective Brands Looks More Like a Turnaround Than a Value Trap
We have initiated coverage of Collective Brands (PSS) at a fair value of $24 per share based on our discounted cash-flow process. The company reported a miserable first quarter, and the stock has languished since, creating an excellent buying opportunity for long-term investors, in our opinion. Legendary investor Peter Lynch made quite a bit of money betting on turnarounds, and we think Collective Brands is the quintessential turnaround candidate. We think the stock is unfairly beaten down, providing considerable upside to patient investors. We are adding the firm to our Best Ideas List.
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Source: Valuentum Securities Inc.
Source: Valuentum Securities Inc. (in millions of USD)
Company Background
Collective Brands adopted a new business model in 2007 when Payless Shoes acquired Stride Rite. The Payless segment of the store consists of over 4,400
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