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$$$MR. MARKET$$$ Loves CHKE
by: mr_market63 (42/M)
Long-Term Sentiment: Strong Buy 05/22/02 03:12 pm
Msg: 451 of 491
Disclaimer: For all you meatheads who don’t do your own homework, proceed at your own risk. It’s YOUR money, not mine.
I don’t often wear women’s clothing but I sure like the way it sells. Today I bought CHKE at 21.50. I will sell it in 4 to 6 weeks at 24.93. Here is why I like CHKE.
CHKE is up 157% over the last 52 weeks and carries a humble P/E of 14.7. It’s IBD rating is a solid 92. It’s r^2 correlation co-efficient since Sept 11 is a very nice 0.89. The industry P/E is a bloated 24, so CHKE with an even modest move towards industry valuations,
How does a company make money without even having to run a business? Simple, just license out your brand and sit back and count the checks when they come in. This is what Cherokee Inc. has done. Now CHKE is a money machine with an operating margin of 70%…..70%!!!
They started out as a casual lady’s footwear company in LA in 1973 (can you say “Hey Man”?). They expanded the brand into apparel and accessories in the early 80’s. When the mega-retailers became more powerful, and thus started putting the squeeze on the wholesalers, Cherokee transformed its business model.
In 1996, Cherokee closed all of their manufacturing and distribution operations, thus cutting out almost all of their costs. All they do now is license out their brand while their products are sourced by the mega-retailers. Cherokee approves all of the graphics, quality and advertising that carries their name. The brand has really rocketed and they are now doing the same thing with a new brand, Sideout.
CHKE’s revenue growth rate over the last 5 years is an astounding 33% compared to the industry growth rate of 6%. Remember, the way CHKE works is that a percent of each dollar of merchandise sold goes almost directly to their bottom line.
CHKE has grown their asset base over the year by 18% while reducing Long Term Debt by 43%. Boy, if this isn’t takeover bait, I don’t know what is. A mega retailer would be crzy not to vertically integrate CHKE into their portfolio at these valuations.
Look at these profitability ratios: Return on Assets = 54%, Return on Invested Capital = 125%
Retail sales of Cherokee branded products exceed $2.0 billion .
"We are pleased to announce our sixth consecutive year of revenue and earnings growth," commented Mr. Robert Margolis, Chief Executive Officer. "We believe our ability to grow during a challenging economic period is a testament to the strength of the Cherokee brand and our business model. This spring we launch in certain European countries with Carrefour and in the fall we introduce Cherokee in the U.K. and Ireland with Tesco PLC. We are very fortunate to have partnered with the premiere retailers in their respective marketplaces. If these partners successfully launch this year, they could provide dramatic earnings growth in the subsequent years." They better be successful, this dude paid himself $2.8 million last year.
"Our financial strength continued improving throughout Fiscal 2002," commented Ms. Carol Gratzke, Chief Financial Officer. "We considerably reduced our accumulated deficit, paid down an additional $10.5 million in debt, and utilized excess cash to repurchase an additional 68,300 shares of common stock." Over the past several years, we have built a highly profitable and proven business. Looking forward, we expect to build on that foundation to drive long-term earnings growth through additional licensing partnerships and brand representations, while growing shareholder value."
Quite frankly, I don’t even know what Cherokee apparel looks like. But I’m not a good reference point, I prefer less clothing anyway.
I am HUGE!!! Bring me your finest meats and cheeses!!
$$$MR. MARKET$$$
by: mr_market63 (42/M)
Long-Term Sentiment: Strong Buy 05/22/02 03:12 pm
Msg: 451 of 491
Disclaimer: For all you meatheads who don’t do your own homework, proceed at your own risk. It’s YOUR money, not mine.
I don’t often wear women’s clothing but I sure like the way it sells. Today I bought CHKE at 21.50. I will sell it in 4 to 6 weeks at 24.93. Here is why I like CHKE.
CHKE is up 157% over the last 52 weeks and carries a humble P/E of 14.7. It’s IBD rating is a solid 92. It’s r^2 correlation co-efficient since Sept 11 is a very nice 0.89. The industry P/E is a bloated 24, so CHKE with an even modest move towards industry valuations,
How does a company make money without even having to run a business? Simple, just license out your brand and sit back and count the checks when they come in. This is what Cherokee Inc. has done. Now CHKE is a money machine with an operating margin of 70%…..70%!!!
They started out as a casual lady’s footwear company in LA in 1973 (can you say “Hey Man”?). They expanded the brand into apparel and accessories in the early 80’s. When the mega-retailers became more powerful, and thus started putting the squeeze on the wholesalers, Cherokee transformed its business model.
In 1996, Cherokee closed all of their manufacturing and distribution operations, thus cutting out almost all of their costs. All they do now is license out their brand while their products are sourced by the mega-retailers. Cherokee approves all of the graphics, quality and advertising that carries their name. The brand has really rocketed and they are now doing the same thing with a new brand, Sideout.
CHKE’s revenue growth rate over the last 5 years is an astounding 33% compared to the industry growth rate of 6%. Remember, the way CHKE works is that a percent of each dollar of merchandise sold goes almost directly to their bottom line.
CHKE has grown their asset base over the year by 18% while reducing Long Term Debt by 43%. Boy, if this isn’t takeover bait, I don’t know what is. A mega retailer would be crzy not to vertically integrate CHKE into their portfolio at these valuations.
Look at these profitability ratios: Return on Assets = 54%, Return on Invested Capital = 125%
Retail sales of Cherokee branded products exceed $2.0 billion .
"We are pleased to announce our sixth consecutive year of revenue and earnings growth," commented Mr. Robert Margolis, Chief Executive Officer. "We believe our ability to grow during a challenging economic period is a testament to the strength of the Cherokee brand and our business model. This spring we launch in certain European countries with Carrefour and in the fall we introduce Cherokee in the U.K. and Ireland with Tesco PLC. We are very fortunate to have partnered with the premiere retailers in their respective marketplaces. If these partners successfully launch this year, they could provide dramatic earnings growth in the subsequent years." They better be successful, this dude paid himself $2.8 million last year.
"Our financial strength continued improving throughout Fiscal 2002," commented Ms. Carol Gratzke, Chief Financial Officer. "We considerably reduced our accumulated deficit, paid down an additional $10.5 million in debt, and utilized excess cash to repurchase an additional 68,300 shares of common stock." Over the past several years, we have built a highly profitable and proven business. Looking forward, we expect to build on that foundation to drive long-term earnings growth through additional licensing partnerships and brand representations, while growing shareholder value."
Quite frankly, I don’t even know what Cherokee apparel looks like. But I’m not a good reference point, I prefer less clothing anyway.
I am HUGE!!! Bring me your finest meats and cheeses!!
$$$MR. MARKET$$$
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