As most of you know, I am very selective about doing stock reviews. Whenever I am not sure what stock to investigate I always go back to one thing: what is something or somewhere that I shop at, buy, or find useful. I also will only write a review on something that I have watched for sometime. Lately however, even everyday stocks have are getting slaughtered. Especially bad are the numbers for fashion retailers. On a whim I decided to check out where I got my last pair of jeans, a little store I like to call The Buckle. Ok so they call it themselves The Buckle as well (BKE). They are a retailer of medium priced but higher quality clothes. They have been managing to eke out profits while everyone else is tanking or hurting, and guess what? Its the end of summer, pretty soon people are going to be buying fall/winter clothes.
Some things I like about The Buckle:
-A look at executive transactions reveals that in the past 8 months, excluding the CEO Dennis Nelson who is fairly steadily income-selling, shows that the Buckle execs have actually acquired more than they have sold. In fact there is a whole sheet of people exercising their stock options…including Dennis Nelson.
-Royce Funds own 100 million in stock. This fund family has one of the better rates of return over the past few years.
-Insiders own 47% of outstanding shares in the company including massive portions by Daniel Hirschfeld, the son of the founder of The Buckle.
-Company has zero debt. Imagine that.
-The average sales per square foot grew 2% annually over the past 5 years.
-They promote store managers from within. The average district manager has been with the company 20 years.
-The company has bought back company stock (always a good sign).
-They pay one of the highest dividends in apparel retailing with the current yield around 1.8 percent.
Buckle is a company that makes money year in, year out no matter the economic conditions. They aren’t the store you necessarily when you think of fashion but they are solid. Senior management, all experienced retailers, is committed to growing the business. They have redesigned their website, and have a great marketing curve.
This all adds up to a very solid business and as I said before, we are just coming into a new clothes buying season which means the short term looks great….and considering all of the above, the long term looks even better.