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The fundamentals of DEST are not |
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Released on Monday, December 5, 2011, 9:00 PM ET
Pittsburgh, PA (SpeculatingStocks) -Destination Maternity Corporation (NASDAQ:DEST) specializes in, well, you guessed it, maternity clothing and apparel. If you have or have had a spouse gifted with the experience of childbirth, or are one of those ladies, you will know what I mean that there is a lot that goes into maternity clothing and it can get expensive too.
Well this company happens to be one of those that has the brilliant business design to harvest that portion of your expenditure. They market to that specific niche group which keeps our society alive and well.
DEST just traded at $15.06 per share (4:00 PM EST, December 5th, 2011) and holds a 52-week range of between $12.17 per share and $25.28. The firm issued a stock split in June of 2011, causing the price to reduce drastically as more shares became available for sale. To be more precise, about 143 thousand shares are traded on a monthly basis. Total this all together and you get a small-cap firm with a total market capitalization of around $196 million.
DEST seems like a profitable investment, producing a annual dividend yield of 4.64%, and an EPS of 1.88. Destination Maternity also has wonderful returns on equity of just under 28%, with quarterly revenue growth coming in at 4.2%, now how’s that for a burgeoning bundle of joy?
Destination Maternity has a nice cash flow, bringing in $21 million from operating activities and cycling through to a total leveraged free cash flow of about $12 million. Not bad when you consider the fact that DEST's total debt comes to only $31 million, causing the current ratio to weigh in at 2.38—indicating a strong financial footing.
Technical indicators at the moment are at a critical inflection point. The MACD bands have just finished following up from a recent trough in prices and have begun creeping back up to a positive divergence; while, the fast stochastic indicators are also showing an upward trend and a possible breakout in the near future.
When playing this stock, it is important to realize that a long-term plan could prove beneficial. With the dividend income stream, you could stave off the effects of inflation on your investment, and—depending on how much you're willing to invest—partially decrease your commission on purchase and sale, provided you have any. Then any gains, or losses as the case may be, would be fully realizable, net of inflation and reduced-partial commissions.
The long-term history of this stock shows that it is a good climber, so buy low and let it ride, you might be happy with the result.
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