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).
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.
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:
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:
I get a neutral leaning towards bad feeling when it comes to the insider transactions for VLO.
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
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.
1 Year Price Target
That price target represents a 33.7% incrase from the current stock price of $25.7. Not too shabby.
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?