Trade Alert – Bought Skechers (SKX) $60
The shoe company is the steady Eddie of the industry and has rewarded investors well, without some of the drama that we’re seeing in the markets right now.
I had this article out last week if you want to read all the details.
https://seekingalpha.com/article/4708354-skechers-is-an-excellent-long-term-buy-and-hold
Here are the bullet points.
- Skechers is a steady performer with an impressive 14% annual return in the last 10 years.
- Skechers’ sustainability, durability, and diverse appeal shield investors from volatility.
- Skechers higher margin Direct To Customer segment is growing faster than its wholesale segment, expanding margins for the company.
- Asia Pacific should continue to grow fast, allowing Skechers to grow revenues at 10% and earnings at 17% for the next 4 years.
- At a P/E of 16, and a PEG ratio of just 0.8, Skechers is a bargain.
Weaknesses
Very competitive industry, even giant Nike has floundered in the last 10 years with little growth, and Under Armor tanked very badly. As the no frills steady performer don’t expect high multiples. They also have a China exposure of 12% and expect that sector to remain weak.