Wednesday, January 07, 2004

Christopher and Banks (CBK)
I believe this company offers a good buying opportunity at its current price of about $18. I have been watching it for a while and it has dropped considerably below its high in the $30s around October due to not so good numbers recently.
But I consider it a good long-term buy, it is conservatively managed and is growing at a good pace. Over the past five years, Christopher & Banks has reported annual sales growth of 28% and earnings growth in excess of 50%. And tight controls on costs have allowed it to sustain a high operating margin--about 18%--one of the highest in the industry.
One disadvantage to CBK is its concentraton in malls which makes it subject to greater price constraints unlike stores like Kohls.
Also keep in mind that this company just recovered from bankruptcy protection in 1996, but I believe that is enough time to see how managers handle their business and so far, they have done a good job, keeping long-terms debts to minimum and maintaining a healthy cash flow. Check it out for yourself and see if you're comfortable with the risk level.

At the current price, I give it a buy.

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