Validea’s pick of the week provides a detailed report on a company that scores well in the stock-screening service’s model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
Zumiez Inc. is a specialty retailer of action sports related apparel, footwear, accessories and hard goods, focusing on skateboarding, snowboarding, surfing, motocross and BMX for young men and women. With a market cap of $1-billion (U.S.), the company has 551 stores; 511 in the United States, 28 in Canada and 12 in Europe. It operates under the names Zumiez and Blue Tomato.
Zumiez has a 15-per-cent return on equity. It has a 2.9 current ratio and no long term debt, which the Benjamin Graham-based approach likes.
The company also gets strong interest from the James O'Shaughnessy-based growth model, which likes its solid 73 relative strength and reasonable 1.3 price/sales ratio.
It has grown EPS at a 32-per-cent clip over the long term (using avg of 3,4 and 5 yr EPS growth rates), part of why it gets strong interest from Peter Lynch model. The Lynch model also likes its 0.68 P/E-to-growth ratio.
Zumiez gets some interest from the Ken Fisher-based model, thanks in part to its lack of debt, strong growth, and 6.5-per-cent three-year average net profit margins.
John Reese is long ZUMZ
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