It’s Friday December 8, 2006, and today on the Investors Corner we want to introduce our readers and listeners to a company that is involved in the retail industry that has been getting some media attention as of late, the company is Retail Ventures, Inc.
Actually before we get into Retail Ventures I want to remind our listeners that they can receive the text version of all of our segments from “Wall Street to Main Street” and “The Investors Corner” by going to
namcnewswire.com , its free to subscribe and to our readers, you can always catch the latest podcast segments from the NAMC Radio by going to namcnewswire.com/namcradio.
Now lets get into Retail Ventures:
Columbus, Ohio based Retail Ventures Inc (NYSE:
RVI) trades on the New York Stock Exchange under the symbol RVI.
What they do: Retail Ventures, Inc. is a holding company that operates three retail store divisions that investors may be familiar with, those being the full-line retailer Value City Department Stores LLC with locations through out the Midwestern, Southern and Eastern parts of the United States. There are over 113 Value City Stores in operation currently. The name brands for less retailer Filene's Basement, Inc. with over 27 store locations throughout major metropolitan areas such as New York, Chicago and Boston, and specialty branded footwear retailer DSW Inc. (NYSE: DSW), which is publicly traded itself on the New York Stock Exchange with over 205 store locations in 32 states.
Competitors: Viable competitors include Federated Department Stores (NYSE: FD),a company that we think is still undervalued but that value should be realized once Macy’s reaches full national deployment but this quarter should show good numbers for the company. Wal-Mart (NYSE: WMT) to a degree due to the low prices that the mammoth chain offers consumers, Target (NYSE: TGT) which is building their clothing product line, Massachusetts based TJX Companies (NYSE: TJX) which has subsidiaries that you may be familiar with such as T.J. Maxx, Marshalls, Bob’s Stores and A.J. Wright, for our U.K. reader they also own T.K. Maxx in the U.K, Wisconsin based Kohl’s Corp (NYSE: KSS) . and Stage Stores (NYSE: SSI) which offers brand name and private label apparel. On the footwear front companies such as Bakers Footwear (NASDAQ: BKRS), Payless Shoesource (NYSE: PSS) and Shoe Pavilion (NASDAQ: SHOE) give DSW some stiff competition.
Vital Company info:
Retail Ventures Inc.
3241 Westerville Road
Columbus, OH 43224
Phone:
Fax:
Web:
52-week range has been from a low of $11.60 to a high of $19.75. The stock closed at $19.32 on Thursday December 7, 2006.
The three-month trading history for Retail Ventures is as follows, back on September 6, 2006 the stock traded as low as $13.95 and hit its highs over $19 the past few days, the stock hasn’t traded this high since 1998, Over the past 100 days the stock has made a new high 6 times and made a new low 12 times.
On Monday December 4, 2006 the company announced that their third-quarter loss totaled 72 cents per share and that is compared with a profit of 92 cents per share a year-ago. Excluding a change in the value of derivatives, the loss was actually 7 cents per share, but still a loss that pushed the stock down to the $18 level from the $19 level.
Institutions and Mutual Funds hold over 62% of the outstanding shares while insiders and 5% holders hold over 10% of the outstanding shares. Institutions and Mutual Funds hold over 68% of the shares in the float and there are over 102 institutions and mutual funds in total involved with Retail Ventures.
Our Outlook:
Retail Ventures is interesting and let me explain, they are involved in a booming retail industry, now don’t believe the hype that you hear on the news about consumers holding their pocketbooks and wallets tight this holiday season. If you look at most publicly traded retail stocks they are at year highs, all except for Federated Department Stores, which has its potential grossly, undervalued by the street.
Now back to Retail Ventures, they have three of the most popular brand name for less type of retail chains in the United States and their growth potential, organic growth and potential growth via acquisition, is evident. They may be on the path of revamping their stores to include a larger product line and possibly more private label merchandise. So that is the growth part of the equation.
The other part has to do with their announcement on Wednesday December 6, 2006 that pushed the stock back above $19 a share. The company announced that they are looking at strategic alternatives for their Value City Chain, not DSW or Filenes just Value City. Now they retained both Financo, Inc. and CIBC World Markets Corp. as their financial advisors to assist the company in enhancing shareholder value.
In plain English they are looking to sell the chain, now this sent investors running to the stock and buying it on that news, while institutions were probably unloading the stock to them to book a nice profit prior to year-end. There was rumor of such a situation occurring, I mean Value City being put on the chopping block, and that helped pushed the stock from the mid $16 range to the $19 range prior to the earnings announcement. Of course the powers that be at Retail ventures found an opportune time to spring their announcement to bring positive interest back in to the company.
The company actually has potential but the problem is that its not a sexy story, it doesn’t wet investors whistle. They are in the right industry with the right type of business but investors are not seeing the value so Retail Ventures is throwing it all out there at this point.
Now I mentioned that the company announced that, in plain English, they may be looking to sell Value City, but if they brought in CIBC they may be looking to spin that division off as its own publicly traded company just like DSW and at the same time raise capital through a public offering to grow that end of the business.
It would make a lot of sense as opposed to the company selling Value City and not having that additional revenue-generating source. Granted they would have cash in the bank from the sale but growth is a key element that investors should be interested in. With that said, Retail Ventures trading at $19.32 is due in part to the announcement but investors are more savvy now than ever and with the input from people like myself and the media, investors will begin to realize the scope of the situation and if they invested in the stock based on the news they may be disappointed.
If Retail Ventures spins off Value City then you have a $20-$25 stock on your hands, if it is an outright sale of the division, which I doubt but it is possible, then you may see a slight push up until the street realizes that that revenue stream will not be coming in any longer. So a spin off may be in their future as it not only gives the parent company, that being Retail Ventures a cash infusion but it also increases shareholder value as the shareholders of Retail Ventures would also get a stake in any potential spin off, and CIBC as well as Retail Ventures are definitely well aware of this.
One parting note, how about the possibility of a Sirius Satellite Radio (NASDAQ: SIRI) XM Satellite Radio (NASDAQ: XMSR) merger, that is the talk of the town as of late, we made that call several months ago and got criticized for it. It just makes too much sense, and when egos are set aside there will be a monopoly in the satellite radio industry.
That’s about it for this edition of “the Investors Corner”, we’ll be back with you for the next edition and make sure to catch the audio of our segment on the NAMC Radio and that can be access by going to namcnewswire.com/namcradio, iTunes or to Streetiq.com the leader in financial podcast at http://www.streetiq.com/dir/NAMC.shtml
We cannot stress enough that investors need to do their due diligence, call the companies, get the information, consult with your investment advisor and if you do not have one consider getting one. Put the same time into investigating these companies as you do when you go to purchase a new television, it’s only for your protection. When it comes to thinly traded securities stagger your orders or put a limit order in to avoid a run up.
NAMC Newswire Note
Go to the NAMC Newswire for updates at
namcnewswire.com and you can listen to the NAMC Radio for the audio version of “Wall Street to Main Street” at namcnewswire.com/namcradio
To register to receive the Wall Street to Main Street Free Daily Newsletter Click Here or go to our site and click on the Newsletter section. namcnewswire.com/newsletter
CEO’s that want to contact us can do so by going to namcnewswire.com or call us at .
Louis Victor
NAMC Newswire
Disclaimer:
None of the information contained on the NAMC Newswire constitutes a recommendation by the NAMC Newswire, its journalist, nor its parent company that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific investors or person. Each individual investor must make their own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy featured on the NAMC Newswire or NAMC Radio Any past results are not necessarily indicative of future performance. The NAMC Newswire, its journalist nor its parent company does not guarantee any specific outcome or profit, and all investors should be aware of the real risk of loss in following any strategy or investments featured on the NAMC Newswire or the NAMC Radio. The strategy or investments discussed may fluctuate in price or value and investors may get back less than you invested. Before acting on any information featured on the NAMC Newswire website or the NAMC Radio segment, investors should consider whether it is suitable for their particular circumstances and strongly consider seeking advice from their own financial or investment adviser. Investors are also urged to do their own due diligence before investing in any security.
All opinions featured on the NAMC Newswire or NAMC Radio are based upon information that is considered to be reliable, but neither the NAMC Newswire, its journalist, its parent company, affiliates nor assigns warrant its completeness or accuracy, and it should not be relied upon as such. The statements and opinions featured on the NAMC Newswire by its journalist are based on their outlook at the time of the statement or opinion, and are subject to change without notice. NAMC may at times hold a position in the companies that it features, in these cases appropriate disclosure is made.
Click to Register for Free
