Author Topic: SSI - Stage Stores Inc.  (Read 1025 times)

DTEJD1997

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SSI - Stage Stores Inc.
« on: February 09, 2016, 01:02:23 PM »
Hey all:

Anybody else looking at State Stores (SSI)?

I used to own them years ago, around $4/share.  The stock ran up to like $7/share so I promptly sold.  It then proceeded to go up to close to $30/share and they raised the dividend.  HAHAHA.

Flash forward to today....SSI is at $7/share with an $.80 dividend.  It is trading at 1/2 book value.  Trailing P/E is just over 8.  The balance sheet is reasonably strong....2.2 current ratio, $172MM debt vs. EBDITA of $120MM.

In the latest quarterly earnings, they missed by $.10/share (revenue decline of 3.5%) prompting mass panic on "the street".

SSI has also reported that SSS for the holiday period will be down about 2.5%.

To further add insult to injury, they are headquartered in Houston TX.  A good chunk of their stores are located in the oil patch and will undoubtedly suffer.  Further complicating things is that they are department store operator.  Of course, department stores are a thing of the past?

To counter that, most of their locations are in smaller towns and are somewhat shielded from larger competition.

I think these guys are OK operators.  The stock is selling at very low points.

Any thoughts/interest?
« Last Edit: February 09, 2016, 10:35:07 PM by Parsad »

DTEJD1997

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Re: SSI - Stage Stores Inc.
« Reply #1 on: January 09, 2017, 08:30:52 AM »
Hey all:

Here is an update....

After the calamity at Macy's, SSI reported that their sales were down also.  They estimate that Same Store Sales will be down around 7% for the holiday period!

The stock is down 19% today to a new 52 week low of $3.26/share.

Since my last post, the company has held the dividend and paid a couple of them.  With today's news, I don't see how they can hold the dividend.  In fact, I would be surprised if the did NOT eliminate it entirely.

Stock is trading for well under .1 of sales.  Stock is trading for 1/4 of book value.

The two things that give me pause are their debt level and the fact that their business keeps falling FASTER than management can react. 

Any thoughts?

johnheiderscheit

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Re: SSI - Stage Stores Inc.
« Reply #2 on: January 11, 2017, 12:31:15 PM »
Where is the BoD on SSI?  The top five officers are raking in like $15ml per year, which goes up every year.  Glazer has been in place since 2012 and the business has declined relentlessly most of that period.  They continue to fritter away money on the buyback and dividend.  Nobody involved with running the company owns any stock (including the board members, which I guess answers my first question).  The shareholder base (at least as of the last proxy) is a bunch of flabby passive asset gathers.

At the current cash burn rate (assuming a runrate of $25ml in losses plus maybe $10ml a year in buybacks and/or dividends) they have a couple of years before cash/the revolver becomes an issue.  Glazer is close to retirement so he would probably be fine with just collecting $5ml a year for the next few years while the equity goes to zero.

At $3 you probably have $2 of downside and $10 of upside over the next couple of years, so it is a nice ratio.  But who has successfully turned around a mediocre mall based retailer in the last few years?

This is a jumble of thoughts but until SSS turn around or an activist appears on the screen I would be on the sidelines.