In a recent small cap value report Paul asked the following question:

"As I've been saying for a while, BOO is expensive now. However, today's update shows us why. Where else can you find this type of very strong organic growth, on high gross margins?"

My answer is Skechers.

According to stocko Boohoo.Com (LON:BOO) is forecast to grow EPS 30.2% in its current financial year and 23.5% next year, current PE is 34.3.

SKX EPS is forecast to grow 40.2% this year and 19.7 next year, current PE is 12.6.

SKX operating margin, RoCE and RoE are all superior to BOO. SKX are the number 2 in athletic footwear in the USA and are at the early stages of international expansion, despite being number 2 in the USA they still only have around 5% of the market so there is plenty of room left to grow.

One of the metrics BOO beats SKX on is gross margins, 57.8% vs 45.2% however given the global growth potential and current low PE I know which stock I would prefer to own.

SKX press releases are available here:

Unlock the rest of this Article in 15 seconds

or Unlock with your email