This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

E Land Buying K-Swiss Footwear After Sales Stumble

Stocks in this article: KSWS ES

NEW YORK ( TheStreet) -- It's the time of the season for acquisitions, it seems; and not just any acquisition, the down and out names, those that have seen better days and been shunned are starting to be scooped up. These are the kind of companies that sometimes hit value investors' radar once the best days are well behind, when the growth crowd has given up and moved on.

We of the value persuasion see something potentially attractive in these companies, whether it's cash, certain assets, or perhaps even a brand name and believe that the markets have punished them too harshly. We hope for improving fundamentals along with renewed interest from investors. Takeovers can be good too, at the right price, that is.

We saw one deal for Energy Solutions (ES) Fun With Acquisitions for the Value Investor announced less than two weeks ago. I believe the takeout price of $3.75 per share is on the low side. There's still time for other offers through Feb. 6, and with the stock now trading 4% above the takeover price, there's some speculation, real or imagined, that there will be other offers. But Energy Solutions was just the beginning.

Late Wednesday, South Korean apparel distributor E Land World Ltd. agreed to acquire legendary athletic footwear company K-Swiss (KSWS) for $4.75 per share in cash, which represented a 49% premium over Wednesday's closing price. This represents a somewhat sad end to K-Swiss as a publicly traded company. The company was founded in 1966, went public in 1990, and was a great growth story, especially between 2000 and 2006, when shares rose form about $3 to $35.

In the past few years, there were new product introductions and acquisitions, but nothing that could get K-Swiss back on the path of profitability. Revenue, nearly $500 million in 2005, fell to $216.8 million in 2010, before rebounding to $268.4 million in 2011. Unfortunately, the company never recovered from the last recession, was unable to regain its niche and has not had a profitable year since 2008. In recent years, K-Swiss was frequently trading below its net current asset value.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs