Yes, I fell into the trap, and once again the trap was so nicely set, with an extraordinary dividend of $6.50 per share 21% of the stock's value, that I bought without even telling you, my friends. I was afraid the stock would run away from me. How silly to buy under such impulses! But I need to tell you, my companions proletarians, the whole story. I was reading trough Magic Formula, a famous website promising the impossible. I found DEBS Deb Shops and whoops I see they offer they 21% dividend and that the company is growing and it is reasonably priced with P/E 16.82, forward expected P/E 14.31, no debt, tons of cash. What could I do? Could I wait to tell you then buy? Sorry No!
Let's look better at this stock. They have shops in mall selling shirts and similar. Maybe they are not the top of the top for teenagers, but who cares! DEBS people seem to be able to continue selling and their numbers are excellent, plus being able to give out such a mountain of cash looks very good. Let's see a few numbers:
with P/E 16.82, forward expected P/E 14.31 … lovely!
Quarterly Revenue Growth year on year: 7.10%… not bad! For a shop it is very good to see sales growth, isn't it?
Qtrly Earnings Growth year on year: 21.30% nice… the increased sales did not correspond to increased costs… Good
Total Debt: 0
Total Cash: 117.52M … which will be used in the best way: they'll give 93 of those to us, the poor, the needy stockholders… and guess what… They'll give them to us on 16-May-06… Next week!
Of course the stock will be likely to lose 21% of its value the day after it delivers us that cash, but the company is under priced, strong and growing, so I believe its price will slowly slowly go back up again, so I buy it and will keep it for a while.
Let the force be with me!
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