What an ugly day in the market today, but hardly unexpected. One stock I took a small position in today during the selloff was Deckers Outdoor (NASDAQ:DECK). This stock is down some 60% from its high this summer and now appears oversold especially given rapidly falling gas prices with should significantly help the retailing sector.
7 Reasons there is significant long term value in DECK at just under $45 a share:
- DECK is selling at the bottom of its five year valuation range based on P/E, P/B, P/S and P/CF.
- Despite all of its recent problems, analysts still expect double digit sales growth for both FY2011 and FY2012.
- Several insiders bought new shares at higher prices in May.
- The stock is selling at just over 8 times forward earnings, about half its five year average (16.1).
- The 15 analysts that cover the stock have a median price target of $75 a share on Deckers, way above the current stock price.
- The company has a robust balance sheet with almost $6 a share in net cash and has a five year projected PEG of way under 1 (.59).
- The stock is approaching long term technical support levels (see chart).
Disclosure: I am long DECK.