NEW YORK (TheStreet) -- Shares of Tumi Holdings Inc (TUMI) are sinking -5.61% to $21.03 on three times normal trading volume after the travel luggage company announced a secondary offering of 8 million shares of its common stock late yesterday.
With the offering, the selling stockholders will give the underwriter an option to buy up to an additional 1.2 million shares.
Tumi said it will not receive any proceeds from the offering.
Separately, TheStreet Ratings team rates TUMI HOLDINGS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate TUMI HOLDINGS INC (TUMI) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TUMI's revenue growth has slightly outpaced the industry average of 10.9%. Since the same quarter one year prior, revenues rose by 15.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TUMI HOLDINGS INC has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, TUMI HOLDINGS INC increased its bottom line by earning $0.81 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus $0.81).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry average. The net income increased by 9.2% when compared to the same quarter one year prior, going from $11.19 million to $12.22 million.
- The gross profit margin for TUMI HOLDINGS INC is rather high; currently it is at 61.22%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.80% is above that of the industry average.
- Net operating cash flow has increased to $16.90 million or 29.33% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.17%.
- You can view the full analysis from the report here: TUMI Ratings Report
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