Nollenberger Capital's Retail Stock Pick: VF Corporation

| About: V.F. Corporation (VFC)

On March 26, The Wall Street Transcript interviewed Angelique Dab, a Senior Research Analyst covering the footwear and specialty apparel industry at Nollenberger Capital Partners Inc. Key excerpts about her favorite sector pick follow:

TWST: As you look at your coverage, whom do you like at this point?

Ms. Dab: I definitely like VF Corporation (NYSE:VFC). They have a true story there in the sense of what is happening on the retail side, both organically and through acquisition. I think that the spinoff of the intimates business allows them to focus on their future earnings potential and to justify a higher multiple to correspond with other manufacturers in the space. The North Face brand for VF Corporation will continue to do well. They also have Reef, Vans and Nautica. All of these things are compelling reasons to own VF Corporation going forward.

TWST: What is it that has changed at VF to make it interesting at this point?

Ms. Dab: It's about duality. VFC has superior supply side operations and also houses brands that are growing at retail. When I think about the house of brands the company can work with, 8% organic growth could be conservative. If you layer on the potential for acquisitions, and a $350 million stock buyback program, VF Corporation looks very interesting.

TWST: Where are they gaining market share? Is it getting into new outlets or more brands? How are they going about generating that 8% growth?

Ms. Dab: I believe it will be generated through the strength of their global brands.

TWST: Are they entering new markets geographically?

Ms. Dab: They recently brought on a JV in India with Arvind Mills. They have a strong foothold in Europe and they're growing their retail base worldwide.

TWST: You mentioned acquisitions. What would they be looking to add? They've got a pretty strong mix.

Ms. Dab: That's obviously a topic of debate. They're looking at global brands that have a continuous flow of unique products or that they perceive could bring in a continuous flow of unique products.

TWST: How have they done at integrating acquisitions into the business?

Ms. Dab: They've done a very good job, as evidenced by North Face and Nautica.

TWST: You mentioned 8% organic growth. Is that what you're looking at for the next couple of years at VF?

Ms. Dab: Management guided along those lines and we agree, yes.

TWST: Where is the stock at this point and where do you think it can go?

Ms. Dab: Right now, I only have an $83 price target on it and it's already at $79, but I believe there is opportunity for upside.

VFC 1-yr chart