Pep Boys (PBY)

Pep Boys - PBY

Forbes noted PBY as a "Buyable Buyback" with 5% of stock being repurchased but thats not all Pep Boys has going for it.

• Insane insider buying.
• P/CF x6.5
• P/S x0.27
• P/BV x1.19
• Cash + Receivables = $52.6 million
• Dividend = 2.31%

The issue is the high debt (1.04 D/E) and a low interest coverage (1.0) as well as inconsistent profitability. The stock is cheap for a very good reason but why all the insider optimism and buybacks? What do they know? Watch the quarterly results for decreasing debt and more same store consistency as managment better manages inventory. If the balance sheet improves and income stabilizes, consider buying where the insiders do: $10-12.50.