What does it all mean that in a sloppy market we are finding more of our kind of stocks? I am not sure but I suspect it means that the internal correction of this market is ending and investors are stepping back in to purchase stocks with potential...hmmm? Anyhow, this one isn't what I would call politically correct....anymore than a Pontiac car...but Cherokee Inc. (CHKE) is having a nice day and meets most of our criteria. I do not own any shares of this stock either.
CHKE is currently trading at $20.90 up $.90 or 4.92% on the day. According to money.cnn.com, Cherokeee "...is in the business of marketing & licensing the Cherokee and Sideout brands and related trademarks and other brands it owns." They are an apparel firm.
On September 10, 2003, Cherokee, according to BUSINESS WIRE as reported on the NYTimes on the Web, announced their record second quarter sales and earnings for the quarter ended August 2, 2003. (Now why can't companies have some REGULAR reporting period...is that too much to ask?) Net revenues rose 15% to $9.9 million compared to $8.6 million in the second quarter of 2003. (Here we are in the second quarter of 2004 and it is only September, 2003...this is kind of like deja vu all over again.)..Net earnings for the three months increased to $3.7 million or $.43/diluted share compared to $3.3 million or $.38/diluted share in the second quarter last year.
Morningstar.com shows a nice, steady picture of revenue growth from $19.3 million in 1999, $24.7 million in 2000, $28.3 million in 2001, $30.7 million in 2002 and $33.1 million in 2003.
Free cash flow has been steady at $14 million in 2001, (results for 2002 are not included on Morningstar), $12 million in 2003.
Assets/liabilities look pretty nice as well with $1.2 million in cash and $19.1 million in other current assets vs. $15.4 million in current liabilities and NO long-term debt reported.
As I am writing CHKE has gone to unchanged...lol...but the numbers look nice so let's continue. The market cap is $164.76 million and the trailing p/e is nice at 12.37. Price/sales a little steep at 4.70. There are only 8.27 million shares outstanding and 3.20 million of them float. 14,000 shares are sold short as of 8/8/03....representing 0.44% of the float.
This looks like an interesting low-tech stock pick for me with steady growth, nice balance sheet, low p/e, and free cash flow positive. The small # of shares outstanding and low volume (only 14,422 shares traded today)...makes the volatility high...went from up nicely to unchanged in minutes lol. If you would like something different, try out this stock...the changing room is right over there...:). Bob