Thursday, May 27, 2010

Aeropostale ARO

Aeropostale ticker ARO is a clothing chain that caters to the young set--13 to 17 years old. I normally am not a fan of clothing stores. They tend come in and go out of fashion very fast. But this particular chain has a couple of things going for it currently. First of all their clothing is not extremely high priced. That makes it very attractive in this tight environment. Secondly, the stock is selling at a very low PE ratio in comparison to other clothing chains.

Let's take a look at the company financials.

Revenue is $2.23 billion.
LT debt is zero
Equity per share is $4.62
Return on assets is 31.6%
Market cap is about $2.6 billion.

Historical data for the company is:

2006 eps $0.67 revenue $1.2 bil
2007 eps $0.88 revenue $1.4 bil
2008 eps $1.13 revenue $1.6 bil
2009 eps $1.48 revenue $1.9 bil
2010 eps $2.28 revenue $2.2 bil

The company operates 938 stores. Of these 44 are in Canada. It also operates an E-commerce The company has begun opening stores focusing on children in the age group 7 to 12 under the name P. S. It has 14 stores under this label in 5 states.

The company just announced earnings for the first quarter of 2011 fiscal year as I write this.

eps for the quarter was $0.48 vs $0.33 for the previous year. Revenue was $464 million vs $408 million.

The current pe ratio with the current stock price at $27.14 is 11.9 for 2010 calendar year earnings. The pe ratio based on projected 2011 earnings is about 10.0.

How does this stock compare to its market segment stocks?

ARO pe 11.9 debt zero revenue growth rate 17% eps growth rate 35%
URBN pe 20 debt zero revenue growth rate 15% eps growth rate 13%

Wednesday, May 5, 2010

Discovery Communications

This is an interesting company. Most would recognize the Discovery Channel which is part of the company. Other channels that the company offers include Animal Planet, the Science Channel, and several other interesting offerings. I find the company interesting because their TV fare is considerably different from most of the other TV channels. Not only does their programming strive to entertain but it also strives to educate and inform. All that is really lacking in their offerings is a news channel and a finance channel to sort of round out their offerings. Maybe sometime in the future.

Discovery Communications is a publicly traded company and that is why I am posting this blog. It has several classes of stock outstanding--DISCA, DISCB, and DISCK. I am not all that fond of companies with different classes of stock, but I may make an exception now and then.

The financials of the company are as follows for 2009.

Revenue $3.5 billion
Net income $560 million
equity $6.2 billion
LT Debt $3.5 billion

The class A shares are trading for about $38-39 a share as I write this. With EPS of for 2010 projected to be about $1.64 the PE is about 24. It is currently a little too high to be considered a buying opportunity currently but on a pull back to about $34 the stock would look reasonably attractive.

One of the interesting aspects of this company is that it serves markets in 180 countries in 35 different languages. It truly serve a world wide market. I have watched the Discovery Channel is England, Estonia, Ecuador, and Peru. This company has the potential of becoming the Nestles of educational entertainment.

Monday, May 3, 2010

April Trip to Peru

My birding buddy Moe and I spent a month in southern Peru looking for birds. Among the places we visited, my favorite was Parque Nacional de Junin. This is near the town of Junin and rather off the beaten path. Accommodations there are somewhat basic. No shower--too cold--but there was a toilet seat and 4 heavy wool blankets on the bed. Junin is at about 12,800 feet and the evenings are cold. The park ranger took us out on the lake to find the Junin Grebe, a flightless bird found only here. This is an excellent site for birding. Around the lake were hundreds of Puna Ibises, Puna Teals, Yellow-billed Pintails, and many other birds. We spent only one day here but should have spent at least two days. From Junin we traveled to Tingo Maria to visit Parque Nacional Tingo Maria and the Oilbird Cave there. At 6:00 pm each night the Oilbirds fly out of the cave by the hundreds in search of fruit trees for their nightly meal along with hundreds of bats. One of the spectacular sites here is the giant spider that lives in the cave and eats Cockroaches. See photo. The Oilbird Cave area is also an excellent place to see the Sunbittern which is tame here. See photo. Our next stop was Yarinacocha and oxbow lake on the Río Ucayali near the large city of Pucallpa. This is a great place to hire a boat for the day and tour Yarinacocha and the Ucayali looking for birds. The Large-billed Terns and Striated Herons are abundant here and many other birds besides. After the boat trip you will want to stop for dinner at the local open air fish restaurant where you select from the day's catch and have it grilled over charcoal and washed down with the best beer in Peru--San Juan. It is a local beer found only around Pucallpa. I could have stayed there for another week just to drink the beer.

From here we took a flight to Iquitos. There are only two ways to get to Iquitos, by airplane or by boat. No roads go to Iquitos. The boat trip is about 4 to 5 days and is only for the very adventurous. The city has almost a half million people and some of them live in houses built on a platform of floating logs tied together with vines. See photo. Iquitos is very near the beginning of the Amazon river. We met three Americans in the mid-twenties there that had purchased a 24 foot canoe and were planning on sailing it down the Amazon to the Atlantic Ocean about 2000 miles. I wish them luck in their adventure.

After Iquitos we flew back to Lima to begin our trip down the Gringo Trail to Cusco. The trail goes first to Paracas-Pisco where one can visit the fish markets and take a boat trip to Islas Ballestas. It was somewhat astounding to see the hundreds of gringos packed into the boats heading for the island. The island is the best place to see the Humbolt Penguin and the Inca Terns and several other local specialties besides, but I believe that Moe and I were the only two there interested in seeing the birds specifically. The rest of the gringos I doubt new one bird from the other. We all did see lots of birds though.

From Pisco it is a quick bus trip to Nazca where small planes are waiting to whisk you over the Nazca Lines. Last year a pilot had a heart attack and killed himself and a couple of tourists from Chile so now all planes have a pilot and co-pilot. The trip is a little more expense as a result but not outrageous--$80 per person. There is no reason to hang around Nazca longer than necessary and it is directly on the route to Cusco so after a two hour stop over, it is on the bus again heading for Cusco. But one should not go directly there. One should stop next in Abancay. This town is the gateway to the Santuario Nacional Ampay. Ampay was my third most favorite place in Peru. It is in the humid Andes and the hiking is fantastic although at better than 8000 feet, hiking is a chore and exhausting. The birding here is great with two specific rarities to find--Apurimac Brush-finch and Apurimac Spinetail. Lots of hummingbirds besides.

When we found out that it would be a four day trip to Machu Pichu, we decided to skip it and head for Puno and Lago Titicaca. We scheduled a trip to Reserva Nacional Titicaca which was quite an adventure. We had to take a 5:00 am collectiva to the small town of Huata where we were to be met at 6:00 am by the park naturalist. We were met by him at 7:00 am on a motorcycle. He took one of us and than the other on his cycle to the park headquarters over a very bumpy trail that went through plowed fields. No place to put our feet except to sort of drag them on the ground. When we were all there, the naturalist put a 25 hp outboard into a wheelbarrow, gave me a 10 foot pole to carry and off we went to the lake shore. The boat was about 20 feet out in the lake and we had to take off our boots, roll up our pant legs and wade out to it. Surprisingly, the lake was not cold even though it is at 11,800 feet. Once we were all in the boat it was off to find the Titicaca Grebe, another flightless grebe that is found only in this one place. We saw several.

Our final stop was Colca Canyon and the town of Chivay. The canyon is famous for its Andean Condors. See photo. On a trip to Peru, it is not to be missed. We saw about 20 condors rise out of the canyon as the morning sun warmed up the thermals. Also saw about 300 gringos watching the condors rise out of the canyon.