While the retail industry as a whole has been suffering as a result of decreased consumer spending Saks has pulled off quite a turnaround. The decrease of the dollar against most other major currencies has been a major factor in this turnaround. A weaker dollar allows wealthy foreigners to come to the US and shop at our stores at a significant discount. The result is 11.7 percent same-store sales growth for 2007. There is also the possibility of a buyout of Saks by Baugur Group which is an international investment company which focuses on retail investments. Most calculations put the potential bid at about $23 dollars per share. Another important factor affecting the price of this stock is heavy short interest. In other words a lot of people are betting that this stock will go down. This is a good thing because if the price of SKS reaches a certain level either by the buyout or by continuing its current success these people who are currently short will cover their short. The result is a short squeeze that would drive the price of the stock up massively. Currently short interest in Saks is at 17.2% of float which is a huge amount. Recently S & P increase their rating on SKS from 3 stars to 4 stars with a price target of 21 dollars per share. All in all I think that Saks is a strong buy and preferably before they report annual earnings on March 5th.
To me this stock looks incredibly cheap. first of all it has beat earnings expectations for the last 8 quarters except for Q3 of 2007. Its growth rate, while expected to slow is still incredibly high especially for the price that it is selling at. its price to earnings ratio is 4.94 which is very good. most companies with slow/no growth have p/e ratios under 10 but this company has a p/e under 10 even though it can still be considered a growth stock. this is reflected in another metric called the peg ratio or price/earning/growth ratio. RIG has a peg ratio of .22 which is the lowest in its industry suggesting that it is a good value. The company also has a very solid balance sheet and operates in an industry that is unlikely to take a serious hit even if the world does slide into a recession. As long as oil stays roughly were it is now or goes higher then the demand for oil rigs should go up. Currently oil is priced for a pretty major worldwide recession and I do not see it getting nea
Comments
online stock broker