Stoney!!!
PLCE is kind of a daring call in this environment.
So why did I call it out then?
Well, for one it's real cheap. It has a PE of 4ish, solid balance sheet, 2.5 EV/Ebitda, it trades at 2.6Xcashflow, ROA 17%, ROE 117% (!) , its nearly 100% institutionally owned, the stores are classy, they own Gymboree too, and their target demographic is pretty much affluent suburban moms with credit cards buying for their kids. They're not scrimping, they want their kids dressed nice. No recession there. (Yet lol)
Of note there have been 8 insider buys in the last 3 months, all relatively small, but one in particular that caught my eye was March 23th. Two insiders bought about 2500 shares each on a day the stock dropped nicely. It had been $53 the day before and dropped to $49ish. They bought the dip.
The damn thing dropped 10% today, and I have to think that was mostly index selling since folks couldn't get out of retail fast enough. Did this one deserve to be punished like that? Probably not, I mean it is cheap. And solid. The retail sector etf's aren't going away and they'll have to adjust some holdings, ie dump the dogs and add more quality. Short interest is pretty high though. 20% so... ya never know.
Well run clothing stores, especially those that cater to the target demographic I noted above, always seem to do well in recessions. The Limited and all its various (now spun-off) stores always held their price levels and even gained through many turbulent markets.
Anytime one sector gets hit particularly hard, there's always a few outliers in that sector that go way up. The Container Store today is a good example. Up 7%.
So I dunno Stoney. But that's my analysis for now. If it drops 25% tomorrow... I better not hear boo from you lol. I tried to find us a beat down diamond in the rough. Not an easy task on a day like today. That's why I waited until the last 10 minutes to post it. Hopefully our "think about the children"- children didn't have time to get in.
EDIT:
One thing I might have missed though, and I really do try to keep no stone unturned so I'm mad at myself for this, but I hope their international division doesn't generate a lot of its top line from Russia or Ukraine. I should have looked. Oh well, it's too late now I guess.
