A Value Stock for Hunters -- and Fishers -- of Bargains

It feels as though we've been down this road before, in 1987, 1999 and 2001. The circumstances and root causes are different, but the fear, anxiety, pessimism and "I should haves" are all the same. "But this time it's different" we hear from pundits and talking heads. To that I answer, "It always is." I for one am taking stock (no pun intended) and looking for bargains. I have no idea when the dust will settle this time around, and perhaps it won't at all. But I am a value investor, and we march onward, even when the deck is stacked against us.

Don't laugh about this one ... just yet. I can see almost Jim Cramer shuddering at the very thought of the subject for this piece. But here goes anyway.

Sidney, Neb.-based Cabela's (CAB - commentary - Cramer's Take) is a specialty retailer and direct marketer of hunting, fishing and camping merchandise. The company was founded in 1961 and went public in 2004. Shareholders have certainly not been pleased by its performance. Shares are down 37% year to date, 61% in the past year and 54% since going public. No wonder Cramer has hated this stock.

With the possibility of a global economic meltdown weighing on investor's minds, it may also seem like an odd time to even be looking at a retailer. But Cabela's may be different, especially given its current price. The company has developed an extremely loyal following among its catalog buyers and those who visit its behemoth retail stores (which can be a massive 247,000 square feet, an area that covers nearly six acres). These stores are showplaces -- some people would call them museums. Perhaps this is one of the reasons why the company's SG&A has been on the high side, as well as why analysts are not crazy about the company. But Cabela's is more than a just a retailer.

---

At the time of publication, Heller had no positions in stocks mentioned.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, a fee-only financial planning he recently launched. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.