NASDAQ:DECK
$135.74
(3/18 4:00PM)
+3.8%
| Open | $130.76 |
Mkt Cap | $1.7 Billion |
| High | $136.34 |
52Wk High | $136.34 |
| Low | $130.45 |
52Wk Low | $48.70 |
| Volume | 417,600 |
Avg Vol 10D | 399,600 |
Ockham's Rating/Recommendation Summary
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DECK Revenue
As a value investing shop, we are interested in seeing how DECK's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 3.10x and the low end of the range at 1.06x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for DECK of 2.07x is below its historical average only slightly. So, while not a huge positive for our analysis, we do feel it is worth noting that DECK does look a bit undervalued on a Price to Sales basis, all other factors being equal. However, if the Price to Sales ratio drops further, Ockham Research is likely to become more bullish on this stock.
DECK Cash Earnings
Looking at DECK specifically in their Cash Earnings capabilities, Ockham views DECK as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for DECK, the current level of Cash Earnings compared to its historical levels helps identify where DECK is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 23.74 and a historical low Cash Earnings per share ratio of 8.13, an investor can relate where value becomes optimal.
So with DECK's current price (latest close of $130.96) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, DECK is 17% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn't exist in a vacuum. So if the market doesn't recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with DECK.
DECK Dividends
While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company. As far as our investing methodology goes, it is not necessary to pay a dividend in order to get a favorable rating, so as for right now DECK gets a neutral rating for the dividend portion of the model. As you can see, we are not receiving historical dividend information from our data provider on DECK at this time.
Interest Builds in DECK as Squawk On The Street Rarely Covers It
It has been sometime since we noted a news story about DECK, which makes the news itself worthy of mentioning.
The Ockham valuation currently has a Fairly Valued stance on DECK because it trades within the price range that we would expect given current market conditions and fundamentals. But as the price has risen in the last week, we have begun to look slightly less favorably on the valuation. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Deckers Outdoor Corporation has actually sunk a bit in comparison to the others. Take notice of the news on this stock because it is up $9.34 since the close of trading yesterday. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards DECK and think that it will generally perform in-line with the S&P 500.
“… DECKERS OUTDOOR make shoes. 18-month high here. The fourth quarter guidance is very strong. The results also good. And that stock is soaring as I said 8. 5% higher. $5. …”
Deckers Outdoor Corporation (DECK) Discussed on CNBC's The Call
Deckers Outdoor Corporation is in the news. Find out how this impacts DECK trading on Ockham Research.
Periodical to feature some of the most innovative names on the cnbc managing editor tyler matheson co hosts the fastest growing company of 2009, and he is here now with a preview. >> let's give you a preview, an hour or so we told you about DECKERS OUTDOOR. Last year, arena resources topped the list of fastest-growing companies, and this year it has slipped to number eight. Still, the company has managed to chart incredible growth by digging for black gold where it's larger colleagues won't. Naturally, nobody can control the price of oil or gas. But arena can control where it hunts for it. >> these are proposed drilling various colors. >> reporter: the company started in the 1980s in oklahoma, focusing on secondary recovery, or behind-pipe potential.
“… R. Last year, arena resources topped the list of fastest-growing companies, and this year it has slipped to number eight. Still, the company has managed to chart incredible growth by digging for black gold where it's larger colleagues won't. Naturally, nobody can control the price of oil or gas. But arena can control where it hunts for it. >> these are proposed drilling various colors. >> reporter: the company started in the 1980s in oklahoma, focusing on secondary recovery, or behind-pipe potential. …”