Tuesday Morning
Tuesday Morning (TUES): Closeout retailer that actually closes its stores during certain periods of the year. A decline in same store sales has brought this stock within value territory. In recent years, Tuesday Morning’s return on capital has been very strong. The stock now has a dividend yield high enough to pique the interest of some value oriented investors. But, if the stock is a bargain at these prices, it is because of the return on capital rather than the dividend yield. On the basis of truly free cash flow alone, this stock is not yet all that cheap. However, even a little future growth would more than justify the current price if Tuesday Morning’s return on capital remains somewhat similar to what has been achieved in recent years.
Several articles at the Motley Fool have mentioned Tuesday Morning. The most interesting is “2 Small Caps You Can Understand” written July 7th, 2004. The most recent is December 27th, 2005’s “An Overcast Tuesday Morning”.
On January 5th, 2005, Shai Dardashti listed TUES as a stock that’s caught his attention. (Make sure you read what Shai wrote in response to the comments as well)