There's evidence that Columbia has the balance sheet and management quality to weather the ongoing economic storm in North America. It has significant potential for organic growth worldwide. The current inventory excess is being carried in products that have a strong replenishment demand. Management has plans to route these products via the company's own retail outlets, so this may decrease concerns about further deterioration in the historically healthy margins.
IMHO, the sudden drop in free cash flow is the single most significant issue to worry about, particularly with respect to assessing the company's potential to survive a recession or depression. It appears that Q3 and Q4 drop of FCF is related to the one-time charges of an acquisition and ongoing costs of increased staffing of the new stores which should partially decrease over time.
My plan is to study the stock for the next quarter. If the price is dragged down by the general market into the low 40's or high 30's, I will buy some there. If not, I'll wait to see the Q4 results and if they are reassuring, buy then.
l
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment