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PSS Board…


As the cheap get cheaper in today's market, I thought it was worth pointing out that inquiries from subscribers regarding PSS valuation have picked up meaningfully - even relative to other stocks. 

We'll never buy a stock just because it's cheap. But we do like when we find what we think are very good stories at irrational prices. Some might argue that it screens well on PE (sub-10x), EBITDA (4.7%), and FCF Yield (17%). But here's another way to look at it. When we break out our estimate for profit by brand/business, it suggests that the core retail business is trading for just under 3x EBITDA.  One thing I like here is that PSS finally has enough cash flow that it could actually consider buying back its stock meaningfully. In fact, at the current rate of cash flow, this company can buy back 15% of its stock per year.

You hear that, PSS Board??? 15% annually! There are shareholders that have gutted this out right alongside you - and have scars to prove it.  If you believe in your strategy, and your team - as we do - then step up and hit the bid. If sitting on cash while Bernanke and friends give you a whopping 0% rate of return on it is better than buying your stock here, then I will be very very afraid. We'll watch what you do, not what you say. Now get busy!

See Segment Analysis Below:

PSS Board… - 1