Josh Arnold
Long/short equity

DSW: Good Business, Bad Price

Thesis

DSW (NYSE:DSW) is a national retailer that specializes in selling footwear and accessories through its own retail stores, website and third party retail partners. The company was founded in 1917 and currently has about 11,000 employees across its 377 locations. The stock has nearly doubled in the past two years on very strong earnings growth and renewed optimism for the company from investors. While the company has turned the corner since the financial crisis, this article will argue that the stock is currently expensive given DSW's ability to generate new sales revenue and ultimately turn that revenue into profit. We'll take a look at DSW's business and its prospects going forward in order to determine a value...

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