Bullish
$KIRK Been here since August, long. Here's the DD I did in December. Here's an update and why I'm bullish with PT of 4 by end of March and 10+ by 2021. Bear theory: No cash/Bankruptcy - See the credit facility PR in Dec. BOA wouldn't give them 75mil if there was a going concern. Also repaid their debt. Bear Theory: Sales and Margins won't improve - Decreased corporate expenses, closing stores, redoing leases, COO gone. Also, the new higher margin products are taking hold. CEO noted improved comp trends. Bear Theory: Funds won't buy - Charles Schwab added 400k in Q4. 2019 was a bad, throwaway year, obviously. That's why we're at 1.33 and 18.5mil MC. However, this was 4$ last June and 11$ the beginning of 2019. *IF* Q4 numbers are as good as the last 2 PRs indicate, KIRK will likely have 80+ mil in inventory and 30 mil in cash. That's 2/share in cash alone. Any hint of a turnaround and the possibility that KIRK returns to profit in '20, and funds will load this. Hence the PTs.
$KIRK If you're investing based on FY19 results, you're going to lose. Let's look at FY20 Margin Improvements: - Likely tariff relief - New higher margin product lines, in for full year - Cheaper distribution and shipping costs - Closing unprofitable stores - Renegotiated store leases Sales Improvements - New product lines - Store layout redesign - Online sales and BOPIS BOA just made sure they have enough capital. This will be back to $4 soon and likely double digits by end of next year. We're at 15 million market cap here, not 150.
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