Thursday, February 16, 2012

Danier: That's A Lot Of Leather

Yesterday, Oddball Stocks had a great write-up of Danier Leather as a potential value investment. I wrote about Danier almost a year ago, but since then it has had a successful few quarters, accumulating cash while improving margins. At the same time, its price has actually fallen some 20%, making it much more attractive. If you're interested, go ahead and read the post at Oddball. The only thing I would add is that there is a dual-class share structure, and so the incentive for management may be skewed towards growing the company rather than returning the company's substantial cash hoard ($32 million in cash versus a market cap of $50 million) to shareholders.

Disclosure: No position

1 comment:

Nate Tobik said...

I wanted to say thanks for linking to my post.

Good point on the share structure, I didn't see that when I was going through the annual report. I agree with you that management doesn't have much incentive to return the cash outside of buybacks.