CAB
Cabela's Incorporated
Consumer
06/25/2014
Presented
| Date | 06/23/2014 |
| Price | $59.59 |
| Market Cap | $4.23B |
| Ent Value | $7.43B |
| P/E Ratio | 19.75x |
| Book Value | $25.57 |
| Div Yield | N/A |
| Shares O/S | 71.02M |
| Ave Daily Vol | 790,000 |
| Short Int | 18.92% |
Current
| Price | $61.50 |
| Market Cap | $4.24B |
| Cabela's Incorporated, together with its subsidiaries, operates as a specialty retailer and direct marketer of hunting, fishing, camping, and related outdoor merchandise. The company operates through three segments: Retail, Direct, and Financial Services. The Retail segment sells products and services through its retail stores. As of December 31, 2013, it had 46 retail stores located in 26 states of the United States; and 4 stores in Canada. The Direct segment sells products through its e-commerce Websites, such as Cabelas.com and Cabelas.ca, as well as direct mail catalogs. The Financial Services segment issues Cabela’s CLUB Visa credit card, a reward based credit card program; certificates of deposits; and underwriting services. It offers its Cabela’s CLUB Visa credit cards through various channels comprising Website, retail stores, inbound telemarketing, and catalogs. The company’s product portfolio includes hunting equipment, such as firearms, ammunition, optics, archery products, and related accessories and supplies; a range of equipment and accessories for outdoor activities comprising fishing and tackle products, boats, electronics, marine accessories and equipments, camping gear and equipment, food preparation and outdoor cooking products, and gifts and home furnishings, as well as all-terrain vehicles and accessories for automobiles and all-terrain vehicles; and clothing and footwear products, such as fieldwear apparel and footwear, sportswear apparel and footwear, and workwear products, as well as apparel and footwear for the casual customers. Cabela’s Incorporated was founded in 1961 and is headquartered in Sidney, Nebraska. |
Publicly traded companies mentioned herein: Cabela's Incorporated (CAB), Dick's Sporting Goods Inc. (DKS), Macy's, Inc. (M)
Highlights
Shares of Cabela’s (CAB) have been under pressure since reaching the low $70s in March. At that point, CAB was up ~10% year-to-date, but bears on the stock have been on the right side of the move since then (due to the bursting of the gun sales “bubble”). However, the presenter is long shares of CAB and thinks the risk/ reward at present levels ($59) is attractive. Taking a step back to look at the big picture on CAB is important because it is a legitimate “open-ended growth story.” CAB has just 55 stores at this time and all of their stores are productive. His initial due diligence on the company “blew him away,” as the customer base is extremely loyal and willing to drive across states to visit the stores. Hunting, camping, fishing, etc. are not as cyclical as other segments of the consumer/ retail sector, and while there is truth to the bears’ gun bubble thesis the core fundamentals suggest shares of CAB deserve a growth company multiple and could be worth as much as $80 over the next 12-18 months.
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