Recent Buy: Total S.A.

I recently made another purchase for my portfolio. I bought 40 shares of Total S.A. (TOT) @ $46.77. The stock closed at $46.40. This purchase adds $109.20 to my forward annual divi outlook bringing me up to a grand total of $2,870.65. I am $129.35 short of reaching my goal for the year of $3k in forward annual divis.

 

I recently read a great article on Seeking Alpha called The Mindset of a Dividend Growth Investor by a guy that goes by the name The Part-time Investor.

http://seekingalpha.com/article/4005439-mindset-dividend-growth-investor

I like this analogy a lot. I do not consider myself a ‘pure’ DGI since I purchase stocks like NAT, CALM, BP, etc. However, I am finally arriving at the same conclusion of just buy, hold, and collect. I even put my TOT order as a market once I saw oil was taking a hit again today! I pretty much always use limit orders! Instead I nonchalantly placed the order and didn’t check it as frequently as I usually do. I am just trying to build up my income sources.

I am hoping the markets get more volatile over the next few months. Let’s get some DIS below $90!

(Just a short update.)

 

Take Care,

 

JT

 

 

 

Looking at HanesBrands Stock

 

Have you ever asked yourself how did I end up here? I did that recently as I was browsing through Guess? Inc’s (GES) website. I had already finished looking through Ralph Lauren’s (RL), Abercrombie and Fitch (ANF),  and American Eagle (AEO) site. I was hoping for an epiphany but it never arrived. My only thoughts were who came up with that name and logo. Also, clothes are too expensive. Time to live Naked and Afraid (or is the show Unafraid?).  I was trying to find my next idea to pull the trigger on since Nordic American Tanker (NAT) didn’t stay at the level I wanted for accumulation.

Then I thought this is just stupid. I will just buy something top notch like Nike (NKE) or VF Corporation (VFC [North Face, Vans, Timberland…]). I know this area is not even close to my fort so I thought buying a dividend aristocrat like VFC or a company like Nike made sense. I still think it does and even like Ralph Lauren from above. However, I then stumbled across a company that has zero glamor but gets used by most people: HanesBrands Inc (HBI).

 

HBI Company Profile (www.dividend.com)

Exchange: NYSE

Hanesbrands, Inc. (HBI) engages in designing, manufacturing, sourcing, and selling a range of basic apparel in the United States and internationally. The company operates in four segments: Innerwear, Outerwear, Direct to Consumer, and International. The company sells its products through various distribution channels, including retailers, wholesalers, and third party embellishers, as well as directly to consumers. Hanesbrands Inc. also licenses its Champion name for footwear and sports accessories. As of December 28, 2013, it operated 268 direct outlet stores in 40 states. The company is headquartered in Winston-Salem, North Carolina. Hanesbrands operates in a highly competitive industry and is reliant on its ability to maintain its brands and to keep up with fashion trends and consumer preferences. Hanesbrands has been paying dividends since 2013. Hanesbrands pays its dividends quarterly.

finviz.com

I like the $25 level. I would be willing to initiate a position at low 25s or lower.  Probably not because support levels are like unicorns. They are made up unless you make one.  The chart above does not show the whole 52 weeks, but the range is from 22.96 – 32.72.

Another metric I typically reference is the RSI (Relative Strength Index). It is usually explained as overbought when above 70 and oversold when below 30. The RSI from finviz.com currently has HBI at 35.25. It shouldn’t be taken as the be-all and end-all (no metric should be!) to make a trade, but it does have merit and should be noted accordingly. I like that RSI but would like to see it even lower.

HBI has a short dividend history:

Payout Amount Calendar Year Annual Growth
$0.4000 2015 33.3%
$0.3000 2014 100.0%
$0.1500 2013 NA

(yahoo finance)

:
Hanesbrands currently yields 1.71% paying out $0.44 annually (paid quarterly). This is not a yield to get excited about, but HBI only has a 22.9% pay out ratio which means plenty of room to grow in the future. Finally, the P/E is at 20.64 with a forward P/E of 11.63.

HBI did slightly miss on their last earnings:

Earnings History 9/29/2015 12/30/2015 3/30/2016 6/29/2016
EPS Est. 0.45 0.46 0.22 0.52
EPS Actual 0.5 0.44 0.26 0.51
Difference 0.05 -0.02 0.04 -0.01
Surprise % 11.10% -4.30% 18.20% -1.90%

(yahoo finance)

I get a neutral leaning towards bad feeling when it comes to the insider transactions for VLO.

Insider Transaction Type Value Date Shares

JOHNSON JAMES C
Director

Disposition (Non Open Market) at $0 per share. Indirect Aug 10, 2016 3,930

NOLL RICHARD A
Officer

Purchase at $25.74 per share. Direct 514,799 Aug 8, 2016 20,000

BURGER ELIZABETH
Officer

Disposition (Non Open Market) at $26.87 per share. Direct 131,018 Jul 26, 2016 4,876

EVANS GERALD
Officer

Disposition (Non Open Market) at $26.87 per share. Direct 75,316 Jul 26, 2016 2,803

MARSH JOHN T.
Officer

Disposition (Non Open Market) at $0 per share. Indirect Jun 19, 2016 7,426

EVANS GERALD
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jun 9, 2016 30,482

MARSH JOHN T.
Officer

Sale at $27.30 per share. Indirect 299,917 Jun 2, 2016 10,986

MATHEWS JESSICA TUCHMAN
Director

Purchase at $27.52 per share. Indirect 49,315 May 5, 2016 1,792

MATHEWS JESSICA TUCHMAN
Director

Purchase at $29.24 per share. Indirect 58,480 May 1, 2016 2,000

JOHNSON JOIA M
Officer

Disposition (Non Open Market) at $27.50 – $27.5 per share. Direct 733,000 Feb 15, 2016 26,660

JOHNSON JOIA M
Officer

Option Exercise at $6.79 – $6.79 per share. Direct 309,000 Feb 15, 2016 45,464

NOLL RICHARD A
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jan 25, 2016 135,768

MARSH JOHN T.
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jan 25, 2016 16,973

EVANS GERALD
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jan 25, 2016 45,984

BURGER ELIZABETH
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jan 25, 2016 13,411

LEWIS MARKLAND SCOTT
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jan 25, 2016 874

MOSS RICHARD D
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jan 25, 2016 27,374

FAIRCLOTH MICHAEL E.
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jan 25, 2016 15,326

UPCHURCH W HOWARD JR
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jan 25, 2016 20,256

JOHNSON JOIA M
Officer

Acquisition (Non Open Market) at $0 per share. Direct Jan 25, 2016 19,819

NOLL RICHARD A
Officer

Automatic Sale at $29.58 – $29.58 per share. Direct 4,184,000 Jan 4, 2016 141,460

NOLL RICHARD A
Officer

Automatic Sale at $28.81 – $28.81 per share. Direct 2,881,000 Dec 20, 2015 100,000

 

The buys/sells of Noll Richard A from above caught my eye. He sold over $6 million worth of stock in high 28s and mid 29s. Then later bought $500k worth of HBI stock at $25.74.

 

Mr. Richard A. Noll, also known as Rich, has been the Chief Executive Officer of Hanesbrands Inc. since 2005 and has also been its Chairman since January 2009. Mr. Noll served as Senior Vice President of Hillshire Brands Company from December 4, 2002 to September 2006. He joined Sara Lee in 1992 as Chief Executive Officer of the U.S. sock business, adding international responsibilities in 1998. He served as Corporate Vice President of Sara Lee Direct since 1999. He served as the Chief Executive Officer of Earthgrains Bakery Group, Inc. from July 2002 to July 2003 and was responsible for the management of the group’s worldwide operations, including fresh, refrigerated and frozen baked goods. He served as the Chief Executive Officer of Sara Lee Bakery Group, Inc. from July 2003 to July 2005. Mr. Noll served as the Chief Executive of branded apparel business at Hillshire Brands Company since April 1, 2006. He served as the President and Chief Operating Officer of DIM, S.A.S. from July 2005 to April 2006. He served as the Chief Executive Officer of Dim since April 1, 2006. From 1992 to 2002, Mr. Noll held a number of management positions with increasing responsibilities while employed by Sara Lee Branded Apparel. He served as the Chief Executive Officer of Sara Lee Legwear, Direct and Mexico Group from July 2001 to July 2002, which included its hosiery, sock and direct retail businesses along with its Mexican apparel operations. He has been an Executive Director of Hanesbrands since September 2005. He served as a Director of The Fresh Market, Inc. from August 2011 to April 27, 2016 and its Lead Independent Director from March 2014 to April 27, 2016. He served as a Director of American Apparel & Footwear Association. Mr. Noll holds a B.S. in Business Administration from the Pennsylvania State University and a Master of Business Administration Degree with distinction from Carnegie-Mellon University.  http://www.bloomberg.com/research/stocks/people/person.asp?personId=4048109&privcapId=4212820

I always like to look at if insiders are buying and selling. I do not know the reasons for the sell and purchases. It could be for diversification in his/her portfolio, a cool vacation, an awesome jet, or many other things.  It’s all something to think about.

 

Analyst Recommendation
9/9/2016
Buy
  • 1 Year Price Target

  • 33.60

  • Analysts

  • 6

  • EPS Estimate

  • 2.22

  • Cashflow Estimate

  • 2.39

 (MSN Money)

(yahoo.com)

That price target represents a 33.7% incrase from the current stock price of $25.7. Not too shabby.

Summary:

I am considering making a purchase in HBI in the future. I like the  payout ratio and their products. The yield is not great, but the company has a lot of room to grow it in the future.

I would put HBI at third on my buy list. FLO (at these levels), NAT (if it drops to low 10s again), and HBI (like around low 25s or below) are the current stocks that I am tracking in this crazy market. It’s fun watching the bears and bulls clash as long as I don’t get mauled or gored in the process.

Do you like HanesBrands as an investment?