Quite Sketchy

Allan Edwards co-CEO of The Markets Are Open already mentioned two stocks yesterday which trade at half there value due to the companies current structure. Edwards elaborated "Magna International (MGA) and Century Bancorp (CNBKA) are two companies which have lots of value, but trade at a significant under premium to there value due to the common stock voting structure." Edwards mentioned his top pick from yesterday Magna International has finally changed its voting structure, but the stock is still trading at its dual voting class structure price and this is why it is such a great buy for the time being."

Allan Edwards turned his attention to Sketchers U.S.A Inc. which the Greenberg family currently has significant control over. The Greenberg's have issued themselves Class B common stock which has ten votes per stock compared to class A common stock which only has one. This gives Robert Greenberg the CEO of Sketchers 43% of all voting stock. Edwards noted that this mean he can essentially do anything he wants. He commentated that stocks which have this sort of structure tend to trade at unrealistically low levels.

Robert Greenberg currently owns 9000 shares of sketchers Class A stock or roughly $270,000 of his company. His salary from Sketchers is over 1 million a year. Normally, this would show how little confidence he has in his own company, but it actually just shows how he uses the company as his own ATM machine. Greenberg sold nearly 400,000 shares in the last year or roughly 12 million dollars on the open market.

Edwards reiterated to his clients "never buy stocks which have dual voting structures, Wall Street is already a game for Most CEO's who misuse disuse and abuse shareholders." Edwards pointed too Visteon Corporation which went bankrupt in Mid 2009. Despite this the Judge during the bankruptcy proceedings Christopher Sontchi had no problem giving an equity incentive program to management for when the company emerges from bankruptcy. Edwards commentated "I guess it was a lot of work for them to lose billions of dollars and they do deserve to be compensated," Edwards griped "this simply does not make sense shareholders invested in the company with their own money for management to make money for them, and they lose it all find a new group of investors, and begin the game again." Edwards said that shareholders should already be skeptical of these sort of companies where management uses shareholders. He said "while these companies, appear to have value, management wants to keep it for themselves." Edwards concluded "Sketchers does not even pay a dividend, so shareholders are compensated nearly nothing." Edwards finished "It is is too bad I was examining Sketchers stock today and I could see the stock would be worth at least $30 with a different voting structure, I wish I could have recommended it for my clients."