Hibbett Sports, Inc. (HIBB) operates sporting goods stores in small and mid-sized markets predominantly in the South, Southwest, Mid-Atlantic and the Midwest. The company operates 927 stores consisting of 910 Hibbett Sports stores and 17 smaller-format Sports.
Hibbett’s merchandise assortment emphasizes team sports complemented by localized apparel, footwear and accessories designed to appeal to a range of customers within each individual market. The company’s primary retail format is Hibbett Sports, an approximately 5,000 square foot store located primarily in strip centers, which are usually near a Wal-Mart store.
Strategy: Price/Sales Investor Based on: Kenneth Fisher Guru Score: 90%
Price/Sales Ratio: [Pass] HIBB’s P/S ratio of 1.38 based on trailing 12 month sales, falls within the “good values” range for non-cyclical companies and is considered attractive.
Total Debt/Equity Ratio: [Pass] HIBB’s Debt/Equity of 0.14% is acceptable.
Long-Term EPS Growth Rate: [Pass] This methodology looks for companies that have an inflation adjusted EPS growth rate greater than 15%. HIBB’s inflation adjusted EPS growth rate of 19.33% passes the test.
Free Cash Per Share: [Pass] Companies should have enough free cash available to sustain three years of losses. This is based on the premise that companies without cash will soon be out of business. HIBB’s free cash per share of 0.11 passes this criterion.
Three Year Average Net Profit Margin: [Pass] HIBB, whose three year net profit margin averages 8.42%, passes this evaluation.
John Reese, Validea Hot List Newsletter, www.validea.com, 877-439-0506, February 13, 2015
