A little background...from Yahoo! Finance..."Cherokee, Inc., together with its subsidiary, SPELL C. LLC, engages in marketing, licensing, and managing brand names and related trademarks primarily in the United States. It owns various trademarks, including Cherokee, Sideout, Sideout Sport, Carole Little, CLII, Saint Tropez-West, Chorus Line, All that Jazz, and Molly Malloy. The company licenses its brand names and trademarks for men's, women's, and children's apparel, including intimate apparel, foundations, and sleepwear; fashion accessories; bed and bath products and accessories; luggage, sports bags, and backpacks; home textiles; domestics and home decor products; home furnishings; and sporting goods. In addition, it assists other brand-owners, companies, wholesalers, and retailers in identifying licensees or licensors for their brands or stores. The company has a strategic relationship with Target Stores, which has the exclusive right in the United States to use the Cherokee trademarks in certain categories of merchandise". CHKE carries a solid balance sheet with low overhead. Double digit ROA, plenty of cash reserve, great free cash flow, and no debt makes it very solid fundamental pick. There is also a 7% dividend payout. The history of dividends have been very consistent. Target & Tesco are most of their customer base...which pose some risk if one of them decided not to renew their contract. The company's growth is slow, however with recent drop in share price...there is room for quick capital gains and compounding dividend growth.
$38.5 (08/11/07)
