Picking Summer Infant (SUMR) as a Top Idea
in mid-October of 2013 has been a boneheaded move so far, as the stock
has declined about 25%. Summer Infant's share price weakness has come in
response to greater-than-expected struggles to migrate away from
low-margin licensed business and reduce SKU counts.
With new
management in place, Summer Infant is continuing its basic strategic
decision to slim down and refocus itself around a smaller number of more
profitable, more competitive SKUs. This is not an unusual or uncommon
phase in prior growth-by-acquisition stories, but the process can be
difficult and stretch on longer than investors' patience. Summer Infant
has a long way to go before it is a more credible threat to Dorel Industries (OTCPK:DIIBF), Newell Rubbermaid's (NWL) Graco, or Mattel's (MAT) Fisher-Price, but Summer Infant doesn't have to become the best to be better.
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Summer Infant Looking To Get Smaller, Smarter, And More Profitable
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