Swank (SNKI) is a competitor of Tandy Brands, a company that has been discussed on this site. These companies produce and distribute (to retailers) belts, wallets and other accessories across a number of brand names. Where Tandy Brands has weaknesses as a potential value investment, Swank has strengths.
Swank trades for just $14 million despite net current assets of $23 million. Swank has also shown a capacity to earn, having generated operating income of approximately $30 million over the last four years. Unlike Tandy Brands, Swank is closely held, with management holding almost 50% of the outstanding shares, led by the company's CEO.
Swank's customer concentration is also much smaller than that of Tandy. While Swank's top customer (Macy's) accounts for 20% of Swank's sales, Tandy relies on Wal-Mart for almost half of its revenue.
Not everything is positive for Swank, however. Management salaries are high; in the last two years, the company's top three earners have made almost as much personally as the entire company has in net income. Nepotism also runs deep here, as the company CEO's daughter was hired and paid almost $300K per year over the last two years.
Since the entire industry is depressed, both of these stocks appear to trade for substantially less than they are worth. However, each individual stock has risks unique to each company that may sour its interest to value investors. Therefore, an investor wishing to take advantage of the depressed prices may wish to spread his investment across each of these companies, thereby lowering company-specific risks while at the same time gaining exposure to what appears to be an undervalued sector.