Quote:
Originally Posted by ChipsAhoya
DDS doesn't look like it's trading at that much of a discount to M? are you just less bearish on the department store sector than the market and choosing the cheapest one, or...?
dynamics are better at DDS, im more comfortable with them.
- family owns control block of special voting shares but by mid year will also have over 50% of economic interest
- William Dillard II clearly knows how to run the business and executed a nice turnaround over past decade
- They return 100% of fcf to shareholders in form of buyback but at least arent stupid about it. Buyback ramped down when stock was over $110, they ramped up this summer under $100 and I bet are going nuts now. Q4 is their big fcf generating quarter
- Real estate undervalued and I trust the work done on it, dont know the macys work.
- Slightly cheaper and in a more defensible position. The higher up market you go the less internet is a risk.
- way less leverage at about .5 ebitda. M has 2x. If im wrong and department stores are in terminal decline you want the one with less leverage. Assuming 10% fcf decline in perpetuity and real estate is zero for both, in dillards you still get $30 per share in macys you get zero