Textiles – Apparel Clothing

Hanesbrands, Inc.
The company has $3.7B of debt. They paid $175M in interest payments. For the life of me I cannot find the value this debt added. In addition tothe debt, the company has managed to spend $62M on acquisitions in FY17 and $964M on acquisitions in FY16. With all of this high finance, I assumed the company’s YOY numbers would be good. They suck. Sales were up 7%, however earnings fell by 82%, free cash flow fell by 60%, and debt increased by 6%. To me, given the debt and the acquisitions these numbers should not be happening. Maybe the company needs fresh management. Just for grins I went back and looked and from FY07 through FY14 the company did not spend any money on stock repurchases. Then in FY15, the stock splits 4:1 and the company spends $351M in FY15, $380M in FY16, and $400M in FY17 on stock buybacks! Really? In the end, get rid of management, get someone to run the show that will stop pissing money away on share repurchases, pay down the debt, stop AR financing and get on with the company’s business.

So what’s ahead. A prior five year hold of the stock would have returned an average of 28% per year. My current future target price for the stock based on a five year hold is $64, which is an average annual return of 9%. As is always the case, please keep in mind that any investment has the potential for loss and that past performance is no guarantee of future results.

Hanesbrands, Inc. (NYSE: HBI) – FYE 12/2017 – OVER VALUED – The stock is currently trading at levels above my most recent fair value estimate – Please See Linked Worksheet

PVH Corp (NYSE: PVH) – FYE 01/2017 – SELL HALF – The stock is trading at levels above my current $97 fair but below my $155 close target – Please See Linked Worksheet

Superior Uniform Group, Inc. (NYSE: SGC) – FYE 12/2017 OVER VALUED The stock is currently trading at levels above my most recent $18 close target. Please See Linked PDF Worksheet
Posted on 04/08/18

Under Armour, Inc. (NYSE: UAA) – FYE 12/2016

Please note that worksheets are updated basis the most current SEC 10-K ANNUAL filing.