Patrick Kim
Le Chateau Inc. (A)
CTU-X
TOP PICK
Sep 21, 2007
Girls’ clothing. One of the best executors out there. Has been beaten up in the last couple of weeks because of a weaker back-to-school report. Has been oversold. 3.65% yield.
This was one of the retailers that was talked about becoming an income trust. It had a run-up because of that. Well managed. Prefers US retailers that there's nothing wrong with this company.
A very cheap name right now. Investors are frightened of the retail space, primarily because of the weak US$ and cross-border shopping cutting into the margins. Same-store sales growth has been double digit. No debt.
Moderately priced women's apparel. A really successful franchise in Canada. Trades at quite a discounted valuation at about 10X earnings. Has a healthy balance sheet with over $1 a share in net cash. Looking at this one.
Pretty good underlying business. Retail has been very much out of favour in this market. Trades at a very low valuation multiple and generates a significant amount of cash flow. Smaller capitalization stock and a very illiquid trader.
Specialty retail clothing. Earnings were up 34% last year. Very flexible and can quickly handle changes in the marketplace. Yield of 4.6%. Pretty safe stock with upside.
This has been a very difficult stock. Recently reported a very bad quarter. He would stay away from this one. Inventory has gone up a lot and their margins have fallen. Cut the dividend totally. Thinks they are in a bit of trouble.
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