Monday, June 15, 2009

Another Jo-Ann Fan

Vince Farrell mentions JAS in a TheStreet.com article this morning. Here's the quote:

Soleil's retail analyst, Jeff Stein, likes Jo-Ann Stores. It's a smallish retailer -- market cap of about $500 million -- which specializes in crafts and fabrics. Annual sales are running at $1.9 billion and the average ticket is about $20. This fits a "stay at home" theme that makes sense in these times. Stein thinks the company will earn $1.05 a share this year and $1.35 next. While not cheap on a current price-to-earnings basis, we think the company under new management since 2006 has earnings power of $2.50 to $3 a share. It currently trades at a free cash flow yield of 11.5% and an enterprise value/earnings before interest, taxes, depreciation and amortization of only 4.2 times against its historic 6.4 times. In addition, Wal-Mart has exited the craft and fabric business and some $800 million in sales is up for competition. Jeff's target is $29. The stock closed Friday at $20.75.

Hmm... where have I seen that WMT news before?!?!

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