Jan. 17, 2020
Hanesbrands has been washed away with retail names and trades at a low valuation even as its business holds steady.
The company has not been a good steward of investor capital, but investing in the current frothy market requires making compromises.
The stock offers 30% upside along with a 4% dividend yield if the company can execute and effectively allocate capital.
The market continues to levitate up. It looks like investors are looking at what went up a lot last year and piling money into the same names. Yes, I do like technology stocks like Apple (AAPL) and Microsoft (MSFT) that you couldnâ€™t give away at 12x EPS a few years ago and now trade at more than twice the valuation. But I would be wary of adding to them at these levels. So, I went looking for a stock that had been left by the wayside and offered upside. In a strong market like we are in, this would almost by definition be one that has some hairs on it. So, I present to you, warts and all, Americaâ€™s underwear king Hanesbrands (HBI).
A five-year stock chart is ugly, with the stock halving in that time frame (albeit after a strong run-up). However, I think the bar for future returns is low. It also presents a wonderful opportunity for an activist investor to get involved, drill some fundamental targets in place, and force management to be accountable for the results of their decisions.
The company has a 4% dividend yield while you wait. If the company executes well, I believe the stock can rise to $21 for 50% upside from the current $14 level.
Hanesbrands designs, manufactures and sells a range of basic apparel for men, women and children. It sells its products through its own retail stores as well as through other retailers like department stores and online merchants. It primarily manufactures its products in Asia and sells around the world. In its attempt to be woke, the company declares itself to be a socially responsible leading marketer. It is headquartered in Winston-Salem, NC.
The company manages its operations in three segments:
Innerwear - Replenishment products like underwear, socks and bras. 33% of revenue, 42% of segment operating profit (22% segment margin).
Activewear - Seasonal products like sweatshirts, licensed sports apparel and college logo apparel. 27% of revenue, 24% of segment operating profit (15% segment margin).
International - Sales of products outside the US, in Europe, Australia, Asia, Latin America and Canada. 36% of revenue, 32% of segment operating profit (15% segment margin).
The segment numbers above donâ€™t add up to 100% due to a small undefined Other category in Hanesbrandsâ€™ reporting.
The companyâ€™s brands include Hanes, Champion, Maidenform, Playtex, Bras N Things, Wonderbra and a few others. 77% of its revenue is from sales to brick-and-mortar retailers, while 23% is from the companyâ€™s own stores and e-commerce platforms, including both owned sites and those of its retail customers.
Hanesbrands has been negatively affected by closures of stores selling its products. Although department stores with their declining foot traffic represent a major outlet for the companyâ€™s products, they can be purchased online as well. This is a steady business where the retail channel through which the product is purchased should not be very significant.
However, there have been some new entrants in the space, and admittedly, it is easier for them to gain traction by selling their products online and marketing via social media versus having to slowly fill physical retail channels.
The companyâ€™s Champion brand has been doing well growing at a double-digit rate, offsetting a decline in the Innerwear business, and there is concern that this growth may slow down.
In the nine months ending September 2019, revenue was $5.2 billion (up 3% YoY) and operating income was $652 million at a 12.5% margin. Net income of $421 million spread out over 365 million shares resulted in diluted EPS of $1.15 per share, up from $1.07 the prior year. The companyâ€™s declared pro-forma EPS is a little higher at $1.26, as it excludes acquisition and restructuring costs.
Hanesbrands has $317 million of cash and $3.8 billion of debt. Its market cap is $5.2 billion and Enterprise Value is $8.7 billion, or 1.2x revenue.
While the companyâ€™s debt load looks high, interest expense is only 20% of its operating income, which is eminently manageable. Over the past twelve months, Hanesbrands has generated more than $600 million of cash, in line with its net income. The company has used the cash primarily to repay debt and pay its dividend. The December quarter is the highest cash generation quarter, and it should pull in more than $400 million in the quarter just ended.
The companyâ€™s CFO left at the end of December, and its Controller is serving as interim CFO while it searches for a permanent replacement.
Hanesbrands is expected to have revenue of close to $7 billion in 2019, with adjusted EPS of $1.76 (guidance of $1.74-1.80). It regularly takes restructuring charges and pretends they are one-time. I would prefer not to give Hanesbrands a pass on this, and estimate that the companyâ€™s GAAP earnings are in the $1.60 range. For the coming year, revenue is expected to decline by 2% as the company continues to feel the effect of store closures. However, effective marketing and aggressively moving its products online should help to mitigate any decline. This is clearly a low bar that management should be looking to exceed. EPS is expected to stay steady, as any decline in operating profit is offset by lower interest expense as the company repays debt.
I believe Hanesbrands should be focused maniacally on growing EPS by holding revenue and margins at least steady while shrinking its share count. The Board (which bears some responsibility for the stockâ€™s underperformance over the last few years) should link executive bonuses to growth in operating income. The company is now at a comfortable leverage position and should use excess cash generated to buy back 5% of its stock every year.
The company periodically makes acquisitions. Its most recent large acquisition was in February 2018, when it acquired the Australian company Bras N Things for almost $400 million. It is unclear whether this acquisition has had a positive impact on Hanesbrandsâ€™ financials, but it has been busy paying down the debt it incurred to consummate the transaction.
Valuation: Fair value of $19 for the stock
Put a reasonable 12x multiple on $1.60 of forward EPS and you get a fair value for the stock of $19. That is more than 30% upside from the current $14 price.
In a bull case, the company will increase its revenue and operating income a bit, shrink its share count and generate $1.75 of clean EPS. Using the same methodology as above, this would translate to a $21 target price. or almost 50% upside.
In a bear case, its revenue and operating income will decline and the company will miss estimates, generating only $1.40 of EPS. Disappointed investors will assign an 8x multiple, resulting in an $11 stock price for 20% downside.
Hanesbrandsâ€™ closest public comparable is Gildan Activewear (GIL), which trades at 15x forward EPS. Consumer goods and retail companies trade at anywhere from 4x EPS for those with rapidly declining profitability to 30x EPS for stars like Nike (NKE).
I do not see any obvious American corporate acquirers interested in the company. There may be foreign ones (Li Ning, maybe?). I do not think the current technological sophistication of underwear will raise national security concerns, but one never knows how the government might spin things. I believe that the stock offers a fantastic opportunity for a cash-rich private equity firm to deploy a couple of billion dollars. An acquisition of the equity at $18 (a 30% premium) would represent an Enterprise Value of $10 billion.
Risks are moderate
The biggest risk here is that Hanesbrandsâ€™ earnings will come in lower than expected due to macroeconomic, competitive or execution factors.
Cotton prices have been trending up in the last few months, although they are still lower than they were a year ago. Hanesbrandsâ€™ margins will get squeezed if they spike up.
Its Champion brand has been a standout, and a slowdown in its growth could cause the companyâ€™s revenue growth to go negative.
Accelerated store closures and the inability of management to transition sales to online channels will cause the company to come in below estimates.
Management has made a number of acquisitions over the last decade, with seemingly nothing much to show for it. Thankfully, they havenâ€™t scratched this itch in a big way in the last two years, but one never knows what an intrepid investment banker may try and sell them.
The short interest in Hanesbrands stock is relatively high at 20% of float. Short-sellers may be right in their assessment of the company. If they arenâ€™t, it provides support for the stock.
bron: https://seekingalpha.com/article/431746 ... king_alpha
Laatste artikelen op Beursig.com
Jul. 14, 2020 8:51 h
Credit Suisse says it thinks Hanesbrands (NYSE:HBI) weathered the pandemic better than most peers.
The firm notes that 50% of the company's store distribution was open during quarantine and +$300M in mask business helped to offset factory deleverage.
"Our call is that over the next 6-mos, HBI is relatively better positioned vs apparel peers due to more stable distribution channels and with retailers already chasing HBI inventory (adding upside potential to NT Street rev & GM ests). We also donâ€™t think current 2021 Street ests reflect the relative stability of HBIâ€™s categories vs other apparel wholesalers with fashion inventory to clear, while also navigating large-scale dept store closures over the next year."
Credit Suisse upgrades HBI to an Outperform rating and assigns a price target of $15 vs. $13 prior PT and the average sell-side PT of $11.67.
Shares of Hanesbrands are up 7.50% premarket to $12.32.
bron: https://seekingalpha.com/news/3590970-h ... tperformer
Momenteel op NYSE: 12,25USD +0,79USD +6,89%
Hanesbrands lĂ¤sst sich voraussichtlich am 30.07.2020 in die BĂĽcher schauen: Auf der vierteljĂ¤hrlichen Finanzkonferenz wird Hanesbrands die Bilanz zum am 30.06.2020 beendeten Jahresviertel offenlegen.
14 Analysten prognostizieren im Schnitt einen Verlust je Aktie von -0,109 USD gegenĂĽber 0,450 USD im Vorjahresquartal.
Im abgelaufenen Quartal soll Hanesbrands nach den Prognosen von 12 Analysten im Schnitt 1,13 Milliarden USD umgesetzt haben. Das entspricht einem Abschlag von 35,89 Prozent gegenĂĽber dem Vorjahreswert. Damals waren 1,76 Milliarden USD umgesetzt worden.
14 Analysten geben in Bezug auf das laufende Fiskaljahr SchĂ¤tzungen von einem durchschnittlichen Gewinn von 0,665 USD je Aktie aus. Im Vorjahr waren 1,76 USD je Aktie erwirtschaftet worden. Beim Umsatz gehen 12 Analysten fĂĽr das aktuelle Fiskaljahr im Schnitt von 5,68 Milliarden USD, gegenĂĽber 6,97 Milliarden USD im Vorjahreszeitraum, aus.
Slotkoers op NYSE: 14,34USD +1,79USD +14,26%
that ain't bad, as they say.
"...Of course, HBI is a dividend stock and has been for some time. The yield has been significant for the past few years and has provided a decent level of total returns to shareholders...."
"... I think you are missing the most important metric here. Free cash flow per share over the TTM is $2.06 / share. This is during a pandemic. If one assigns a mediocre 14 multiple to FCF / you get a value of $28.84 / share. The shares are significantly undervalued. Cash flow is, in general, a much better metric for determining the earnings power of this company.
HBI is a straight up value play. Many of their products are bought over and over for years by consumers. Their basic products are consumer staples. This not an exciting business , but it makes money. The company also has a very good ROIC. Capital allocation has been good. Not every company grows like MSFT or AMZN."
bron: https://seekingalpha.com/article/439790 ... anesbrands
Een oudere bijdrage maar met up to date comments.
Hanesbrands is underwear, wat onder de bovenkleding wordt gedragen (en misschien dus minder zichtbaar voor kleine beleggers ), Ontex ook maar die gingen gisteren de andere kant op op de USA stockmarket
The apparel maker has stripped down its growth prospects to its essentials.
Rich Duprey (TMFCop)
Feb 9, 2021 at 12:14PM
Shares of Hanesbrands (NYSE:HBI) were soaring 22% higher in morning trading Tuesday after the basic-apparel maker reported solid sales and earnings growth in the fourth quarter.
The results indicate Hanesbrands was perfectly positioned to capitalize on the health and wellness trends that developed in the wake of the coronavirus pandemic. Its basics brands like Playtex, Maidenform, and Wonderbra meshed well with the casual clothes consumers chose, as did its Champion brand.
Sales for the quarter rose to $1.8 billion from $1.75 billion, and handily beat consensus estimates of $1.64 billion.
Although Hanesbrands' adjusted profits were $0.38 per share, down from $0.46 last year, they trounced Wall Street's forecast of $0.29 per share.
Hanesbrands' "innerwear" segment saw sales jump 13% year over year, and it was able to gain share in the kids market, while athletic wear sales were up 11% due to strong global sales of Champion, a nice turnaround after Target stopped carrying the C9 line last year.
Its international business also continued to improve with sales up 2%, though on a constant currency basis they were down 3% from last year. Hanesbrands also declared a $0.15 per share dividend, the 32nd consecutive quarter of making a shareholder payout.
With expectations for first-quarter sales to grow 14% at the midpoint of its range with a 10% expansion in operating profits, Hanesbrands is ready to run higher still.
bron: https://www.fool.com/investing/2021/02/ ... -22-today/
Hanesbrands $ 20,82 +1,61 (+8,38%)
Algemene euforie op de beurzen of beginnen de mensen weer marcellekes te kopen ?
Om het voorgaande in een bredere context te plaatsen:
Mega Squeeze Coming: Last Week Saw Biggest Hedge Fund Shorting Since May SUNDAY, MAR 07, 2021 - 17:45
Last week was an emotional and P&L rollercoaster for every trader, and even though stocks closed almost unchanged from where they opened, what happened in the past five days was anything but smooth sailing...
Starting Monday, when stocks soared in a relief rally from previous Friday's tumble as yields stabilized, Goldman prime reported that the GS Prime book "was net bought for a second straight day (+2.1 SDs vs. the average daily net flow of the past year), driven by risk-on flows as long buys outpaced short sales 8 to 1." Furthermore, "on a cumulative basis, the $ net buying from the past two days (Fri and Mon) was larger than any other two-day period since early November. While Fridayâ€™s net buying was driven by short covers in Macro Products, yesterdayâ€™s net buying was driven by long buys in Single Names."
Remarkably, according to Goldman's hedge fund facing division, "all regions were net bought led in $ terms by North America and Asia. Asia saw the largest $ net buying in more than two years (+3.8 SDs), driven by long buys in Japan and to a lesser extent short covers in Hong Kong. Meanwhile, just in the US, Goldman says buying outpacing short sales 5 to 1.
All of this changed the very next day when stocks stumbled amid renewed rising rate pressures and just a day after Goldman Prime saw a dramatic surge in buying, whiplash set in with Goldman reporting the "largest global short sales since May" with the GS Prime book was net sold yesterday (-0.9 SDs vs. the average daily net flow of the past year), driven by short sales outpacing long buys 1.7 to 1." In fact, the mid-week puke wasn't so much selling as short-selling, as "modest net selling (-0.5 SDs) was driven by short sales outpacing long buys 1.5 to 1."
The next day was one of confusion, with Goldman Prime reporting that its prime book was modestly net bought "driven by long buys outpacing short sales 1.2 to 1", although North American markets were not on the buying agenda as "with the exception of North America, all regions were net bought led in $ terms by Europe and Asia."
Which brings us to the end of the week, when shortly after the biggest shorting in almost one year by some hedge funds, other hedge funds have decided to go all WallStreetBets on their ass, and start a squeeze, with GS prime reporting that "hedge funds bought the US Mega Caps and Non-Tech Single Names yesterday" as "the GS Prime book was modestly net bought for a second day (+0.5 SDs vs. the average daily net flow of the past year), driven by moderate risk-off flows as short covers outpaced long sales roughly 3 to 1."
As GS prime details, the end of the week saw "the first net buying in 3 days (+0.9 SDs) driven by short covers in Macro Products and long buys in Single Names" even as "ETF shorts decreased -0.8% (-1.4% week/week; +24% YTD), driven by covers in Small Cap and Health Care ETFs which outweighed continued shorting in Corporate Bond ETFs. 8 of 11 sectors were net bought â€“ Health Care (long buys > short covers), Real Estate (long buys > short covers), Consumer Disc (long buys > short sales), Consumer Staples (short covers), and Energy (long buys + short covers) were among the most net bought. On the other hand, Info Tech (short sales > long buys), Materials (long-and-short sales), and Industrials (long-and-short sales) were the only net sold sectors." Curiously, Info Tech stocks - i.e., the biggest winners of 2020 - were net sold for a third straight day. That said, in $ terms the net selling in the sector was ~75% of Wedâ€™s activity and driven by short sales outpacing long buys (i.e., there was no significant long liquidation).
As a result of the whiplash, Goldman Prime calculates that "fundamental LS managers experienced another worst alpha day since Jan 27th, driven by sell-off in Momentum and Info Tech, and have lost 1.8% of alpha over the past three days."
What does all of this mean for markets?
Well, in a week where stocks first spiked then tumbled only to reverse, and where substantial damage was done on HF P&L, immediately after a furious burst of shorting, which has pushed gross short exposure to the highest level since the start of 2020...
... it is likely that the short squeeze we observed on Friday which started with the post-EU close ramp that pushed the EMini higher by over 100 points in 4 hours...
... is about to spread and force even more forced squeezes on Monday especially now that the $1.9 trillion Biden bill has been passed by the Senate. The only thing that could prevent a sharp spike in stocks in the overnight/tomorrow session is another burst higher in yields and bond volatility (MOVE). So keep a close eye on both but absent fireworks, prepare for a continuation of Friday's meltup as hedge funds - especially Fundamental L/S funds - scramble to close their latest round of shorts, and catch up to their sharplt outperforming systematic peers.
bron: https://www.zerohedge.com/markets/mega- ... newsletter
ChampionÂ® Athleticwear Unveils New Artist Series Supporting Talent Across The Country
Series Features Four Artists, Each with a Collection Defined by Authentic, Inspired, Grassroots Voices
May 12, 2021 09:00 AM Eastern Daylight Time
WINSTON SALEM, N.C.--(BUSINESS WIRE)--Champion Athleticwear, makers of authentic athletic apparel since 1919, is introducing an Artist Series to celebrate the diversity of talent and creativity found across the United States. The series features four street artists who have unique perspectives on design, fashion and personal expression. The artists have ties to cities across the country, including New York City, Chicago and Seattle.
The first drop is from Ricardo Gonzalez, a designer and artist from Durango, Mexico, currently based in Brooklyn, New York, who lives by the philosophy, â€śITâ€™S A LIVING,â€ť which inspires his work. Ricardo uses typography as his medium and has incorporated his signature script into a variety of work spanning large-scale murals to commercial work for brands to simple stickers seen on the streets. As part of the collection drop, Champion commissioned Ricardo to create one of his signature murals in Brooklyn, New York.
Ricardoâ€™s vibrant, colorful script style will appear on a limited collection of Reverse WeaveÂ® hoodies, heritage graphic tees and Reverse Weave cut-off shorts for men and Reverse Weave cropped cutoff hoodies, heritage graphic tees and Reverse Weave shorts for women. The apparel has black, oxford gray, white and scarlet colors supporting neon text overlay of phrases including â€śBetter Yourself,â€ť â€śKeep Tryinâ€™,â€ť â€śThe Way Upâ€ť and â€śChange The Future.â€ť Ricardo hopes his signature positive messages and uplifting designs unify people together during these challenging times.
â€śAs an artist and designer, it means so much to me to collaborate with Champion on an inclusive collection that promotes my positive aesthetic to the masses,â€ť said Ricardo Gonzalez. â€śThe phrases we chose for this collection fit really well with Championâ€™s philosophy. My favorite piece is â€śBetter Yourself,â€ť as it expresses self-improvement and what it means to be competitive as a Champion. I hope when people wear my Champion pieces that they feel empowered and like a Champion.â€ť
Apparel in Ricardoâ€™s Itâ€™s A Living collection ranges from $35 to $75 in sizes XS through 2XL and will be in Champion retail stores and online at Champion.com, Champs Sports and Footaction beginning May 12, 2021. Each Artist Series drop will be available for a limited time with Brooklyn-based neon artist Adam Fu, up next in the series. Fu will be followed later this year by New York-based Steffi Lynn and Chicago-based Merlot.
â€śChampion is founded on the principles of inclusion, creativity and self-expression,â€ť said Jon Ram, group president of global activewear for Hanesbrands Inc. â€śand we are dedicated to fostering up-and-coming talent. The Artist Series is an exciting new chapter in our commitment to supporting a wide range of artists with the goal of inspiring all consumers to be their own Champion through their apparel â€“ the ultimate form of self-expression.â€ť
Ram added that Champion is committed to creating a better world for the champions of today and tomorrow where all are included. The Artist Series adds a new dimension to the brand, which is known for increasing access to sports in a number of ways, including providing apparel and uniforms to Special Olympics USA, Urban Dove and NBPA Summer Camps.
To learn more about Championâ€™s Artist Series drops, visit Champion.com and follow the brand on Instagram, TikTok, Twitter and Facebook.
Since 1919, Champion Athleticwear has offered a full line of innovative athletic apparel for men and women including activewear, sweats, tees, sports bras, team uniforms, footwear and accessories. Champion uses innovative design and state-of-the-art product testing to ensure uncompromised quality and innovative apparel for its consumers. Champion Athleticwear can be purchased at department stores, sporting goods, specialty retailers, and at Champion.com.
bron: https://www.businesswire.com/news/home/ ... he-Country
Jul. 22, 2022 8:15 AM ETHanesbrands Inc. (HBI)
Hanesbrands has plenty of upside potential as it grows its Champion brand internationally and continues to return cash to shareholders.
It has its own manufacturing facilities, which makes it better positioned than rivals in face of supply chain disruptions.
The dividend and stock price appear to be attractive at the current valuation.
Who says you should take emotions out of investing? As a buy and hold type of investor, I take pride in ownership, especially in companies whose products I use on a regular basis. This brings me to Hanesbrands (NYSE:HBI), whose namesake and Champion clothing I have worn for many years, and recently, I became a shareholder in the company. In this article, I highlight why HBI is currently trading at an appealing price for income and growth, so let's get started.
Hanesbrands is a consumer goods company that produces a range of basic apparel for men, women, and children. It operates through the business segments of Innerwear, Activewear, and International, and over the last 12 months, generated $6.9 billion in total revenue.
Hanesbrands' stock has seen plenty of pain over the past year, posting a 37% decline since the same time last year as the initial exuberance over work-from-home trends have worn off. Moreover, inflationary pressures and general concerns around supply chain disruptions and economic recession have further piled on the pressure. Plus, a strong dollar doesn't help when the company translates its international sales back to the USD.
0It would seem as if the company is doing horribly based on the stock price performance, but that doesn't appear to be the case. This is considering the modest but respectable 5% YoY revenue increase (7% on a constant currency basis) during the first quarter, driven by strong Champion brand sales of 6% YoY (constant currency).
while U.S. Innerwear sales increased by just 1.5% YoY, it's worth noting that sales have held up well against a difficult comparable last year, when many consumers worked from home and loaded up on the company's products. Notably, sales on a 2-year stacked basis grew by an impressive 37%.
Looking forward, management expects strong growth for the Champion brand, and is guiding for $3.2 billion in annual sales by 2024, up from $2 billion last year. This includes seeking to grow its market share through expanded product offerings for younger female consumers in this brand. It also leads with product innovation, which includes its X-Temp technology, providing cooling and wicking benefits that especially help during hot summertime weather.
HBI also has key competitive advantages in its supply chain, through ownership of its own manufacturing facilities. This operating flexibility enabled HBI to simultaneously launch recent products in both the U.S. and Australia, with coordinated support from regional marketing campaigns. This strength was noted by Morningstar in its recent analyst report:
Another key strategy for Hanes is to improve the efficiency of its supply chain. It has already made progress in this area, having achieved a 15% increase in manufacturing output over the past four years. Hanes, unlike many rivals, primarily operates its own manufacturing facilities.
More than 70% of the more than 2 billion apparel units sold by the company each year are manufactured in its own plants or those of dedicated contractors. We believe the combination of strong pricing and production efficiencies should allow Hanes to maintain operating margins around 20% for its American innerwear business despite somewhat inconsistent sales.
Moreover, it appears that HBI has plenty of greenfield opportunities internationally, as noted by management during the recent conference call:
Looking specifically at Champion, we continued our expansion in China adding new stores in the quarter through our partners. In Europe, we continue to reach new consumers with new styles and silhouettes for kids. And we doubled our spring summer footwear sales driven by an expanded product offerings across channels and geographies.
Meanwhile, HBI continues robust shareholder returns, having repurchased 5.8% of its outstanding shares over the past 5 years ($25 million worth during Q1) and pays a well-covered 5.3% dividend yield with a 33.7% payout ratio. While HBI has just a BB rated balance sheet, management has made meaningful debt reduction, with a $414 million reduction in long-term debt since January of 2021.
Lastly, I see value in HBI at the current price of $11.39, with a forward PE of just 7.1, sitting well below its normal PE of 12.4 over the past decade. Sell side analysts have a consensus Buy rating with an average price target of $14.46, implying a potential one-year 32% total return including dividends.
I believe HBI is a compelling investment at the current price, with plenty of upside potential as the company grows its Champion brand internationally and continues to return cash to shareholders. While the balance sheet is a bit leveraged, management has taken steps to reduce debt and I believe the company can continue to generate strong growth going forward. Meanwhile, HBI throws off an attractive dividend yield for income-focused investors. HBI is a Buy.
bron: https://seekingalpha.com/article/452504 ... vidend-buy
Maar ondertussen is de koers wel tot een Year Low gezakt van 9.39