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The stock price of many companies can be heavily influenced by factors that are not company specific. It is not unusual for the performance of a company’s business sector to have a major impact on its stock price. This article will review the stocks of six companies that are in the retail apparel sector, which has been one of the stock markets best performing sectors. In my relative valuation analysis, I conclude that DECK and VFC are buys right now while VRA, NKE, RL and UA should be avoided for now.

Deckers Outdoor Corporation (DECK) DECK has a market cap of $101.25 billion with a price to earnings ratio of 24.34. The stock has traded in a 52 week range between $71.18 and $118.90. The stock is currently trading around $105. The company reported third quarter revenues of $414 million compared to revenues of $278 million in the third quarter of 2010. Third quarter net income was $62 million compared to net income of $42 million in the third quarter of 2010.

One of DECK’s competitors is Wolverine WorldWide Inc. (WWW). WWW is currently trading around $34 with a market cap of $1.64 billion and a price to earnings ratio of 13.4. WWW pays a dividend which yields 1.4% versus DECK which does not pay a dividend.

DECK manufactures and sells casual footwear and clothing. The company has increased revenues and net income in each of the last four years. Over the last four years, revenues have increased by 229% and net income has increased by 401%. In the third quarter of 2011, the company continued its strong earnings growth and increased its year-over-year revenues by 49% and net income by 48%. Predictable the stock performance has been outstanding and is up by 36.2% over the last 52 weeks and 426.9% over the last three years. DECK’s outstanding third quarter earnings, indicate that the company is still growing at a rapid rate, which leads me to believe that the stock price will continue to move up. I rate DECK as a buy.

Vera Bradley Inc. (VRA) VRA has a market cap of $1.44 billion with a price to earnings ratio of 25.59. The stock has traded in a 52 week range between $24.83 and $52.36. The stock is currently trading around $36. The company reported second quarter revenues for the period ending on July 31st, in the amount of $103.7 million compared to revenues of $80 million in the second quarter of 2010. Second quarter net income was $13.6 million compared to net income of $9.2 million in the second quarter of 2010.

One of VRA’s competitors is Coach Inc. (COH). COH is currently trading around $62 with a market cap of $18.03 billion and a price to earnings ratio of 20.45. COH pays a dividend which yields 1.5% versus VRA which does not pay a dividend.

VRA engages in the production and sells, of women’s handbags and accessories. The company has done a good job of growing earnings. VRA’s year-over-year third quarter revenues increased by 29% while its net income increased by 47.8%. The company first traded on the Nasdaq on October 21, 2010, and closed at $24.85. Since its opening, the company’s stock price has increased by 43.6%. Over the last 52 weeks the stock price has increased by 9.01%. I like VRA’s growing earnings, but if I were to invest in this area, I would prefer to invest in Coach Inc. which has a longer track record, plus pays a dividend and has a lower valuation. I rate VRA as a hold.

NIKE Inc. (NKE) NKE has a market cap of $44.01 billion with a price to earnings ratio of 20.61. The stock has traded in a 52 week range between $69.43 and $97.68. The stock is currently trading near the top of its 52 week range at around $95. The company reported first quarter revenues for the period ending on July 31st, in the amount of $6 billion compared to revenues of $5.2 billion in the first quarter of 2010. First quarter net income was $645 million compared to net income of $559 million in the first quarter of 2010.

One of NKE’s competitors is Adidas AG (OTCQX:ADDYY). ADDYY.PK is currently trading around $33 with a market cap of $13.77 billion and a price to earnings ratio of 15.8. ADDYY.PK does not pay a dividend versus NKE whose dividend yields 1.6%.

NKE manufactures and sells sports footwear and apparel, and is one of the best known brand names in the world. NKE is well established, and has been profitable in each of the last ten years. The company is still growing and its year-over-year third quarter revenues increased by 15% which matched its net income which also increased by 15%. The company’s stock has performed relatively well and is up by 10.2% over the last 52 weeks and 87.2% over the last three years. NKE executives seem to feel confident about the company’s future earnings, because on November 17, it was announced that the dividend would be increased by 16% from $1.24 to $1.44. On November 22nd, CNBC stock analyst Jim Cramer said that he was bullish on NKE. NKE should also get a boost from the news that the NBA has resolved its labor dispute. NKE is a bellwether company that has been able to grow its earnings and stock price. I rate NKE as a buy.

Polo Ralph Lauren Corporation (RL) RL has a market cap of $12.72 billion with a price to earnings ratio of 20.68. The stock has traded in a 52 week range between $102.23 and $164.55. The stock is currently trading around $140. The company reported second quarter revenues for the period ending on October 11th, in the amount of $1.9 billion compared to revenues of $1.5 billion in the second quarter of 2010. Second quarter net income was $232 million compared to net income of $205 million in the second quarter of 2010.

One of RL’s competitors is Liz Claiborne Inc. (LIZ). LIZ is currently trading around $8 with a market cap of $754.85 million and a negative price to earnings ratio. LIZ does not pay a dividend versus RL whose dividend yields 0.6%.

RL markets and sells clothing and accessories for men, women and children. The company has been profitable in each of the last ten years. The company is still growing and its third quarter year-over-year revenues increased by 27% while net income increased by 13%. Investors like RL’s consistent earnings growth, and have bid up the stock by 33% over the last 52 weeks, and 230% over the last three years. On November 10th, the company reported earnings that blew away Wall Street estimates. Despite the strong earnings report the stock price has dropped by around 5% since that time. I believe that the stock price had run up so much that it was due for a fall. I would recommend buying shares of RL if the stock price falls to near $130 per share. I rate the stock as a hold.

Under Armour Inc. (UA) UA has a market cap of $4.05 billion with a price to earnings ratio of 46.78. The stock has traded in a 52 week range between $51.77 and $87.40. The stock is currently trading around $78. The company reported third quarter revenues of $465 million compared to revenues of $328 million in the third quarter of 2010. Third quarter net income was $46 million compared to net income of $35 million in the third quarter of 2010.

One of UA’s competitors is the Columbia Sportswear Company (COLM). COLM is currently trading around $48 with a market cap of $1.61 billion and a price to earnings ratio of 1.56. COLM pays a dividend which yields 1.9% versus UA which does not pay a dividend.

UA manufactures and markets footwear and sports apparel. The company increased its year-over-year third quarter revenues by 41% while its net income increased by 33%. In 2010, the company increased its net income by 45.6%. Investors like what they see in UA and have pushed up the stock price by 38% over the last 52 weeks and 240% over the last three years. I like UA’s growing earnings but the stock's current valuations are quite high. The stock (price to earnings ratio 46.78/price to book ratio 6.9) is more expensive than its competitors. I would be careful with this stock and look to buy on dips. I rate UA as a hold.

VF Corporation (VFC) VFC has a market cap of $14.81 billion with a price to earnings ratio of 21.67. The stock has traded in a 52 week range between $80.40 and $142.50. The stock is currently trading around $134.23. The company reported third quarter revenues of $2.7 billion compared to revenues of $2.2 billion in the third quarter of 2010. Third quarter net income was $300 million compared to net income of $243 million in the third quarter of 2010.

One of VFC’s is GAP Inc. (GPS). GPS is currently trading around $18 with a market cap of $9.04 billion and a price to earnings ratio of 10.35. GPS pays a dividend which yields 2.6% versus VFC whose dividend yields 2.3%.

VFC manufactures and markets, footwear and casual apparel. The company’s products include popular brand name items like The North Face, Wrangler, Nautica and Harley Davidson. The company’s year-over-year third quarter revenues increased by 25% while its net income increased by 23%. The company’s stock price has increased along with its earnings, and is up by 59.8% over the last 52 weeks and 183% over the last three years. In addition to the VFC’s strong earnings and stock performance, the company’s dividend has increased five times by 117% over the last five years. In spite of the stock's price run up, its valuation is not very high (price to earnings ratio 21.67/price to book 3.32). VFC is a fast growing company that is selling at an attractive valuation. I rate VFC as a buy.

Source: 6 Top Performing Stocks To Consider Right Now