Volcom Research Report 3

Volcom Research Report 3

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Unformatted text preview: June 27, 2010 NASDAQ: VLCM VOLCOM INC BUY A+ A A- HOLD B+ B Annual Dividend Rate NA B- C+ C Annual Dividend Yield NA SELL C- D+ D Beta 1.83 Sector: Consumer Goods & Svcs VLCM BUSINESS DESCRIPTION Volcom, Inc. designs, markets, and distributes clothing, footwear, accessories, and related products for young men and women primarily under the Volcom brand name in the United States and internationally. STOCK PERFORMANCE (%) 3 Mo. Price Change 5.93 1 Yr. 63.80 3 Yr CAGR 10.54 -5.62 -5.49 E+ E E- Market Capitalization $483.1 Million F BUY 52-Week Range $11.10-$24.79 Sub-Industry: Apparel, Accessories & Luxury Goods SMA (50) 04/30/2010 $26.01 Price as of 6/24/2010 $19.82 Source: GICS SMA (100) 1 Year 1 Year 2 Years Years 28 TARGET PRICE $26.01 TARGET PRICE $26.01 TARGET PRICE $26.01 PRICE $26.01 TARGET PRICE $26.01 TARGET PRICE $26.01 TARGET PRICE $26.01 GROWTH (%) Last Qtr 13.32 78.53 82.35 Revenues Net Income EPS RETURN ON EQUITY (%) VLCM Q1 2010 11.17 Q1 2009 8.50 Q1 2008 20.00 25 25 23 23 20 20 18 15 18 13 15 10 13 8 3 Yr (Ann) -25.02 12 Mo. -10.04 51.05 51.47 Weekly Price: (US$) D- RATING SINCE TARGET PRICE 10 5 Rating History HOLD BUY BUY Volume in Millions Ind Avg 18.52 16.97 22.45 S&P 500 10.37 4.28 13.07 2 6 4 1 2 2009 2010 0 2010 COMPUSTAT for Price and Volume, TheStreet.com Ratings, Inc. for Rating History P/E COMPARISON RECOMMENDATION We rate VOLCOM INC (VLCM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, compelling growth in net income and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow. 19.24 20.36 21.06 VLCM Ind Avg S&P 500 HIGHLIGHTS The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 13.3%. Growth in the company's revenue appears to have helped boost the earnings per share. 2008 2009 VLCM's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick r...
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This note was uploaded on 10/25/2011 for the course BUS 214 taught by Professor Waker during the Fall '08 term at Cal Poly.

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