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4:42 pm
May 12, 2010
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Jae Jun
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I haven't looked at the details so I wouldn't be talking based on facts.
Maybe the company has turned it around completely. Looks like ADGF lowered expenses but the question is whether the optimism shared by management is true.
Valuation doesn't seem to have changed much.
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http://sec.gov/Archives/edgar/…..elease.htm
"We are pleased with our start in 2010 and continue to be optimistic
regarding our long term prospects," said Mr. Chip Brewer, CEO and
President of Adams Golf. "Our Q1 revenues were down slightly; however,
our profitability was significantly improved. Additionally, we had open
orders totaling $18.1 million at the end of the quarter as compared to
open orders of $5.3 million at the same point in 2009. We believe this
increase in open orders is primarily a result of more forward looking
planning by select retailers as well as delays in product availability
from various vendors. We expect the product availability delays to be
resolved during the current quarter."
"Furthermore, and perhaps most importantly, we continued to make
progress on our brand development and market share objectives during the
quarter:
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We had significant growth in our U.S. market shares. According to Golf
Datatech LLC, for the first quarter of 2010, in the combined On and Off
Course Channels, our U.S. iron dollar share was 11.96%, up 21% year
over year. Our wood dollar share in the same channels was 6.53%, up 11%
year over year. Also according to Golf Datatech, but based on unit sales
in the combined On and Off course retail channels, in March 2010 our
Idea a7os iron set was the #1 selling model of irons in the U.S.
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We continued to strengthen our brand through tour exposure and
sustained our position as the #1 hybrid on the PGA, Nationwide and
Champions tours.
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We were energized with the market response to our current product
offerings including the Speedline Fast 10 drivers, Idea a7 and a7 OS
irons and most recently, the interest in our recently introduced Idea
Pro Black Super hybrids Idea Pro Black CB1 irons and our Idea Black CB2
irons."
"We are encouraged with the progress we have made in both the product
and brand side of the business as well as the improved financial
results. Overall market conditions in Q1 showed some signs of
improvement over 2009 but remained challenging on a historical basis. We
remain dedicated to working towards future growth of the company,"
concluded Mr. Brewer.
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3:36 pm
May 12, 2010
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john_allen
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so Jae, what's your take on valuation for ADGF now?
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1:17 pm
May 12, 2010
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Jae Jun
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ADGF finally moving up after 1 year of staying at its lows. Great call Floris.
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1:31 pm
October 10, 2009
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Jae Jun
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I remember seeing an ad on TV where a golf club company was involved. Lots of design, testing and research involved in the production of clubs. So they would have value in that area as well.
Otherwise I think we offer both sides of the story so it's up to whoever is interested in ADGF to decide.
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5:03 am
October 10, 2009
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Floris
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Post edited 2:06 am – October 10, 2009 by Floris
Hey Bart,
I respectfully disagree with Jae. I hold a long position in ADGF. The reason i bought it (beside the net net status, which is always great), is because adams makes great golf clubs. I play golf and I love the clubs. I think it has quite a way to go in terms of market share. This does not imply it will happen but the fact that they do not make rubbish products increases the MoS for me.
Furthermore accounts receivables, unless you expect a lot of major golf dealers to go under, you could expect a fair return from these assets were ADGF to go bankrupt.
Reg,
Floris
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1:38 pm
October 9, 2009
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Jae Jun
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I've mentioned ADGF a couple of times but never liked it because of the high accounts receivables and finished goods.
I recently had a discussion on the following post
http://www.oldschoolvalue.com/…..smed-insm/
As I mentioned in the comments, golfers are fickle customers. Trends and technology are also constantly changing. After a few months, the initial price of that inventory is going to get slashed as they try to clear out inventory.
Not my style of net net.
I always prefer ones that have a high cash position and are operating the business to cut costs.
This is also why I decided not to go ahead with ENWV. They have lots of cash at the moment, but it wasn't by cutting costs and getting leaner and I have no confidence they will preserve the cash as well. They are likely to squander it on making acquisitions.
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3:54 am
October 9, 2009
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Bart
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Hello Jae,
congratulations with your excellent website and forum, I've been following you since the beginning of your blog, and you're an excellent source of ideas and knowledge.
I wonder if you had any thoughts on ADAMS GOLF? I've noticed a write-up by Barel Karsan on it (another blog I highly respect). The investment thesis looks good, but what bothers me a bit it that a lot of the assets are made up of accounts receivables, so isn't the risk that they might be marked down substantial? Still, the margin of safety seems huge, with no long-term debt and current assets – current liabilities a lot higher than the market cap.
Your opinion would be highly appreciated.
best regards,
Bart
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