Cache Inc.
(NDAQ:CACH) shares rose $1.94, or 12.62%, to $17.31 today after the
company announced a 6 percent rise in same-store sales along with a one
million share buyback. The news comes just one day after Vardon Capital
Management noted that the company was trading at 2/3 its private market
value with $4 per share in cash and therefore should implement a share
buyback program. Shareholders are extremely satisfied with the jump in
same-store sales and clearly applauded the buyback announcement.
Cache
is a specialty retailer of social occasion sportswear and dresses
targeting style-conscious women. This month, the company acquired
Adrienne Victoria Designs in a move that many applauded. There is some
speculation that it was this acquisition that has provided the boost to
sales and may help boost the company's operating margins and net profit
going forward.
Meanwhile, Vardon Capital, which owns 9.1 percent
of the company, said that the share buyback should help close the gap
between the current market pries and its intrinsic value. The move will
also help boost the company's earnings per share and ROA/ROE ratios.
Finally, the company's mid-single digit operating margin has the
potential to reach double digit levels through such initiatives as well.
So,
why are shares up today? Well, the company's acquisition of Adrienne
Victoria turned out to be a great decision while the company's share
buyback announcement helps ensure that the company has confidence in
itself going forward and is dedicated to closing the discount gap in
its valuation. Combined, these factors make CACH a stock
worth watching!
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