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Sally Jones
Sally Jones
Articles (580) 

SAC Increases SKX Stake 265% as KPMG Resigns from Skechers

April 09, 2013 | About:

Does humanity really buy more performance footwear coinciding with major sporting events like the World Cup and Olympics? Apparently, yes. Projections are that global footwear is anticipated to reach $51 billion by 2017, thanks to consumer push inspired by major sporting events ahead, both in Brazil: the World Cup in 2014 and the Olympics in 2016. Asia is also forecasted to have the highest growth in athletic footwear retail in the next five years with household incomes on the rise.

With about a year before the FIFA World Cup, SAC Capital Advisor’s founder Steven Cohen increased his position in global shoemaker Skechers USA Inc. (NYSE:SKX) by 265.1% as of April 4, 2013. This brings the billionaire investor’s total shares to 2,011,532. The current share price is $21.51 with a change from average up 2%. GuruFocus research shows that SKX is up 71% over the last 12 months, and up 18% since January.

Skechers USA Inc. has a market cap of $1.07 billion. The P/E ratio is 113.8 and the P/B is 1.2.

Cohen’s holding history shows an average cost of $16 per share, with a 34% gain over the long haul since fourth quarter 2008:

Skechers USA Inc. is a global leader in footwear, featuring casual and high-performance brands. The company designs, makes and markets more than 3,000 styles for men, women and children. Internationally, the company also sells its footwear in Canada, the UK, Ireland, France, Germany, Spain, Portugal, Italy, Switzerland, Austria, the Benelux region, Brazil, Chile and Japan, and has joint ventures with companies in China, Hong Kong, Malaysia, Singapore and Thailand. With the upcoming world sporting events as a macro booster for selling more athletic shoes, the company’s extensive network of global distributors is poised to sell products in over 120 countries and territories, and more than 650 Skechers stores around the world. Skechers competes in the athletic footwear industry against much larger companies Nike (NYSE:NKE) and Adidas (ADDDF), as well as K-Swiss (KSWS), all focused on building brand and cutting production costs to remain competitive.

Another company plus, Skechers is also expanding its global business through licensing agreements for fitness and kids' apparel, bags, watches, eyewear and additional merchandise.

Will the well-loved global sporting events put a lot more shoes on a lot more feet? Only the Gurus know.

Breaking news: Today Skechers announced that its accounting firm KPMG resigned yesterday. According to a company press release, “Skechers was informed by KPMG that KPMG’s lead Audit Engagement Partner on the Skechers account is under federal investigation for providing non-public information of his clients to a third party in exchange for money. The third party then used that information to trade stocks of several West Coast companies.”

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

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