RedChip Independent, a division of RedChip Companies Inc announced that it has initiated research on Tandy Leather Factory Inc. Joe Blankenship, MBA, CFA Level I Candidate, RedChip Research Analyst, wrote in the report:
"We are initiating coverage on Tandy Leather Factory Inc with a BUY rating and a twelve month price target of $11.60. The Company has embarked on a relatively conservative expansion of its retail stores, which provides a higher gross margin and improving operating income for the Company.
"Expansion of the Company's retail stores requires minimal capital investment; the primary investment is inventory to keep the stores stocked. Generally, the Company's inventory does not follow trends or seasonal fashions, so obsolescence is not a big factor.
"The Company's expansion can be funded out of cash generated by operations, and a continued cash accumulation might suggest a stock buy-back, which can positively impact earnings per share on remaining outstanding shares.
"We recommend TLF as a conservative investment in a specialty retailing environment, free from the volatile swings of fashion, yet always fashionable in the form of accessories made by its customers."
Tandy Leather Factory Inc
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