I
Roshe Run PRM Men Black Metallic Silver Yellow HATE retail stocks, who doesn’t? If you look at my holdings, it is pretty evident
Men Nike Free Run 3.0 V4 Wolf Grey Reflect Silver Blue Glow that
Men Nike Free Run 3 Midnight Fog Volt Blue Glow I am not a
Women Nike Free Run 5.0+ Pink Grey fan of the
Women Nike Free Run 5.0+ Pink White sector. Despite my macro concerns, I am well aware of
Women Nike Free Run 2 Sail White Red Grey the potential for babies in the bathwater. As I
Men Nike Free Run 3.0 V4 Dark Grey Reflect Silver Black wrote in October (13 Extremely
Men Nike Free Run 3.0 V4 Tiffany Blue Quilted Oversold
Nike Roshe Run Men Grey Solar Red Consumer Stocks), I created a screen to identify potential bargains. 3 of those names were from the shoe
Nike Roshe Run Men Royal White sector, certainly
Men Nike Free Run 3 Chrome Yellow Silver Platinum White Quilted out of proportion with their representation in the sector. As you can see in the table below, the three
Nike Roshe Run PRM Men Wolf Grey Peacock Blue stocks
Women Nike Free Run 2 Anthracite Black White Purple have performed well relative to the broad market and to
Women Nike Free Run 3.0 Magenta Reflect Silver Pure Platinum the Consumer and Retail sectors in general:

Of course, the only reason that the three stocks have outperformed is that SHOO announced that it is in talks to "enhance shareholder
Women Nike Free Run 2 Grey Sail Pink White value". Still, though, the other two stocks have performed pretty much in line with the
Nike Roshe Run Woven Women Royal White market. Having taken a closer look (and actually
Men Nike Free Run 5.0+ Turquoise White Black having made a purchase at DSW), I
Men Nike Free Run 4.0 V2 Light Charcoal Silver Chrome Yellow think that Shoe Carnival (NASDAQ:SCVL) (13.90, $180mm) is way too cheap and worth considering for investment despite
Nike Roshe Run Reddish Brown White not facing favorable fundamentals.

SCVL operates a chain of 293 shoe stores in the Midwest, South and
Roshe Run PRM Men Navy Metallic Silver Lightning Yellow Southeast that sells
Women Nike Free Run 2 Stealth Grey White Solar Red to the entire family. They describe their strategy as employing value pricing, which makes sense
Women Nike Free Run 2 Pink White Orange Red Quilted if
Nike Roshe Run PRM Men Black Sport Green Volt you look
Nike Roshe Run Men Black Solar Red at where they operate: Strip centers in lower middle class neighborhoods. Make no mistake; Cary
Nike Roshe Run Energy Blue Green Quilted Bradshaw
Men Nike Free Run 3 Granite Blue Glow Pro Platinum won’t be buying
Men Nike Free Run 3 Granite Blue Glow Pro Platinum
Men Nike Free Run 2 Red Gold Black White her Manolos
Nike Roshe Run Men Royal Volt here!

Let’s face it; this
Nike Roshe Run Wolf Grey Carton Green company is probably facing a lot of headwinds. The industry
Men Nike Free Run 2 Anthracite Black White Purple Quilted is suffering from declining same store sales. My
Women Nike Free Run 2 Pink White Lime Yellow investment
Nike Roshe Run Hyp Women Navy Dark Grey thesis certainly
Nike Roshe Run Carton White wouldn’t count
Nike Roshe PRM Men Anthracite Grey Blue Glow Sail White on some big turnaround in the
Women Nike Free Run 2 Drench Blue Orange White near term, but there are a number of reasons
Women Nike Free Run 2 Stealth White Purple Grey to consider this as a low risk
Nike Roshe Run Men Red White way to buy a company
Women Nike Free Run 4.0 V2 Ultrapurple Reflect Silver Wolf Grey that has delivered 13% compound EPS growth over the past decade and generates free cash flow.

The Stock
Nike Roshe Run Army Green Meihei is Cheap No
Women Nike Free Run 2 Grey White Blue matter how one looks at this stock, it is cheap. On a PE basis, the stock trades
Men Nike Free Run 4.0 V3 Anthracite Black
Men Nike Free Run 4.0 V3 Anthracite Black White Green at 12X
Nike Roshe Run Woven Men Red Black Quilted "depressed" FY08 and 9X FY09. On a P/B basis, the stock
Men Nike Free Run 4.0 V2 Black University Red trades at 0.9X
Nike Roshe Run Carton Blue book (100%
Men Nike Free Run 5.0+ Black Blue Volt tangible).
Roshe Run PRM Women Peppermint Candy Sail On a P/S basis, the stock trades at .28X. Finally, on an
Nike Roshe Run Sand Color Alarm Red EV/EBITDA basis, it trades at a measly 3.5X:

There Are Several
Nike Roshe PRM Men Anthracite Grey Blue Glow Sail White Defenses Having reviewed the 10
Women Nike Free Run 2 Pink White Quilted K and familiarized myself with some of the history of the company, I learned that this company has a conservative Midwestern culture (based in Indiana). The Chairman’s family owns 30% of the stock, which indicates that shareholder interests are most likely aligned with management’s. There hasn’t been a single share
Men Nike Free Run 3.0 V4 Black Gym Red Wolf Grey of stock sold by insiders in the past
Women Nike Free Run 3 Hot Punch Neon Pink Volt Quilted 11 months, with
Men Nike Free Run 3 Volt Anthracite Black Neon Yellow the last sales
Women Nike Free Run 2 Drench Blue Orange White at
Men Nike Free Run 3 Deep Royal Blue Silver Volt Quilted about
Nike Roshe Run Woven Men Rainbow $27 in small size. The shoe industry is interesting in that
Women Nike Free Run 2 Grey Sail Pink White while the
Men Nike Free Run 2 Black White Blue Yellow timing of
Men Nike Free Run 3 Sequoia Electric Green purchases is certainly discretionary in the short term (perhaps why sales
Men Nike Free Run 4.0 V2 Dark Grey Cool Grey Volt are suffering now), ultimately there is a replacement necessary, especially for kids (17% of sales). So, in the weak economy that I
Nike Roshe Run Women Black White expect, a shoe retailer has the potential to be somewhat defensive. The balance
Women Nike Free Run 2 Grey White Green sheet and
Nike Roshe Run PRM Men Black Anthracite Siren Red cash flow of the company offer defense
Nike Free 3.0 Light Bone Reflective Silver Iguana Green Men as well. The company
Men Nike Free Run 3 Blue Glow University Red Pure Platinum Quilted has generated positive free cash
Men Nike Free Run 3.0 V4 Black Gym Red Wolf Grey flow (CFO CapEx) despite opening stores at the rate of
Nike Roshe Run Men Black Red about 10% per year. While the company doesn’t own
Nike Free 4.0 Game Royal Blue Electric Green Pure Platinum Wmns its real estate, the balance sheet is pristine. First, Equity is
Nike Roshe Run Woven Men Royal White $200mm, which is up 3% from
Roshe Run PRM Men Hazelnut Oxford Brown Anthracite Sail White a year ago (which is up 6% on
Men Nike Free Run 2 Grey White Blue Black a per share basis, as the company has repurchased stock). Cash stands
Women Nike Free Run 4.0 V2 Stealth Reflective Silver Volt at $15mm, and there is no debt. One of the things to watch out for with respect to retailers
Women Nike Free Run 3 Gym Red White Reflect Silver Volt is unhealthy inventory growth. In the case of
Nike Roshe Run Woven Men White Black SCVL, inventory
Men Nike Free Run 3.0 V4 Dark Grey Electric Green Wolf Grey is up just 3%
Men Nike Free 3.0 Soar Blue Pure Platinum Reflective Silver from a year ago on
Nike Roshe Run Women Grey Blue sales
Men Nike Free Run 3 Chrome Yellow Silver Platinum White Quilted growth of 5%. Looking back to
Men Nike Free Run 2 Blue Glow White Black Volt two years ago, the sales are up 4% while inventory is up 2%. No
Men Nike Free Run 3.0 V4 Wolf Grey Game Royalblue Wolf Grey apparent
Nike Roshe Run Men Obsidian Volt
Men Nike Free Run 2 Shield Stealth Black Yellow Grey problem there! Looking at
Women Nike Free Run 3 Gym Red White Reflect Silver Volt the big picture, we have a
Nike Roshe Run PRM Men Wolf Grey Peacock Blue company whose earnings estimates are falling amidst weak industry conditions, but there doesn’t
Nike Roshe Run PRM Men Anthracite Carbon Grey Siren Red appear to
Women Nike Free Run 2 Shield Stealth Black Orange White be a
Nike Roshe Run Woven Women Red Black glaring problem with the
Nike Roshe Run Hyp Women Grey Pink Quilted company. The
Nike Roshe Run Hyp Women Black Pink strong balance sheet and the history of
Nike Roshe Run Men Anthracite Volt Quilted positive cash flow should give comfort. The 13
Men Nike Free 5.0 Purple Force Bright Citrus Anthracite Quilted area was resistance in 2001, support in 2003 and
Roshe Run PRM Men Navy Metallic Silver Lightning Yellow then in 2004, and resistance again in early 2005. Tax loss selling could be an issue for the next 40 days. More imminently, the
Women Nike Free Run 4.0 V2 Stealth Reflective Silver Volt
Nike Roshe Run PRM Women Red White Sail Quilted company reports
Men Nike Free Run 3 Wolf Grey Gym Red Stealth on 11/20. The report will most likely not be pretty, but it could serve
Women Nike Free Run 2 Black White Anthracite as a
Women Nike Free Run 2 Sail White Red Grey potential opportunity to pick up some shares. I fully expect to see the analysts take down their numbers significantly. As of 9/30, the 5 top
Nike Roshe Run Army Green White Quilted holders (FMR, DFA, Entrust and Barclays and Bonanza) owned over 35%
Nike Roshe Run Woven Women Red Black of the company, with none reducing significantly in Q3 (though
Nike Roshe Run Woven Women Rainbow there was
Nike Roshe Run Carton Alarm Red
Women Nike Free Run 5.0+ Pink White a seller of 3% of
Women Nike Free Run 3.0 V4 Volt Reflective Silver Platinum the company). Short interest has increased recently
Men Nike Free Run 2 Red White Black and represents about 6 days
Men Nike Free Run 4.0 V2 Pure Platinum Reflect Silver Soar Blue of trading volume and 9% of the shares outstanding
Men Nike Free Run 2 Blue White Grey (though a higher amount of the shares excluding
Nike Roshe Run Carton Alarm Red the Weaver Stake and the 5%+ holders).

Conclusion There is nothing particularly
Nike Free 4.0 Game Royal Blue Electric Green Pure Platinum Wmns exciting about SCVL,
Nike Roshe Run PRM Women Red White Sail Quilted but
Women Nike Free Run 2 Black White Purple Anthracite it
Men Nike Free Run 4.0 V2 Wolf Grey Reflective Silver Cool Grey is so cheap that it deserves a look. Perhaps it is
Men Nike Free Run 4.0 V2 Iguana Reflect Silver Cargo Khaki Quilted too early to buy,
Men Nike Free Run 2 Grey White Teal Blue but the downside seems quite limited and the stock should command some attention in 2008 due to the defensive characteristics that I cited. As anyone who owned Restoration Hardware (RSTO) knows, sometimes it doesn’t pay to wait for a good chart or improving fundamentals. In this case,
Nike Roshe Run Men Iguana Black the
Men Nike Free Run 3 Cool Grey Silver Sail University Red stock is much cheaper and has
Women Nike Free Run 2 Anthracite Black Silver Mango a much stronger balance sheet. This is an
Nike Roshe Run Sand Color Alarm Red industry that has been consolidating for years. I might just add
Women Nike Free Run 5.0+ Blue Grey White some after they report.

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