May. 9, 2014, 4:03 AM| Comment!
May. 8, 2014, 5:15 PM
May. 2, 2014, 1:34 PM
- Joel Greenblatt's screen looks to find stocks with high "earnings yield" - a high ratio of profits to enterprise value. Companies are further screened for a strong return on capital. When a stock scores well with both criteria, it's usually a good company being undervalued by investors.
- For picking individual stocks, there are probably better methods, but as a group, Magic Formula names have vastly outperformed the broad market.
- Although defense names have done well over the past couple of years, the Magic Formula continues to identify Northrop Grumman (NOC +0.2%), General Dynamics (GD +1.4%), and Raytheon (RTN +0.6%) as attractive. Firearm names Smith & Wesson (SWHC +0.8%) and Sturm Ruger (RGR +0.3%) also make the cut.
- A number of videogame makers show up as well: Take-Two (TTWO +0.3%), Activision Blizzard (ATVI +0.2%), GameStop (GME +2.8%), and the struggling recent IPO King Digital (KING -0.3%).
- Not too surprisingly, the Magic Formula also continues to like plenty of big-cap tech names: Cisco (CSCO -0.2%), CA, Inc. (CA -0.5%), Microsoft (MSFT -0.5%), Hewlett-Packard (HPQ -0.5%), and Apple (AAPL +0.1%).
- Hardly market laggards, media names like Time Warner (TWX -0.8%), Viacom (VIA +1.4%), Omnicom Group (OMC), and Starz (STRZA +2.3%) also show up on the list, as do struggling multi-level marketers and for-profit education stocks: HLF, NUS, APOL, ESI, CPLA.
- Punished by investors for not being as hot as they once were, Coach (COH +0.2%), Francesca' Holdings (FRAN +0.1%), and Gap (GPS -1.3%) are Magic Formula picks today.
Apr. 16, 2014, 2:05 PM
- Gap (GPS +1.5%) CEO Glenn Murphy says the company will drive further online growth through innovation and technology.
- As part of the initiative, the company will expand its reserve in stores service to all Gap stores by the end of Q2.
- A new order in store capability will also be tested at stores.
- Sales in China are expected to reach $1B in three years.
- Gap Investor Meeting Webcast
Apr. 11, 2014, 5:37 PM
Apr. 10, 2014, 5:39 PM
Apr. 10, 2014, 5:06 PM
- Gap's (GPS) March same-store sales fell 6% Y/Y. That's slightly better than February's 7% drop.
- Gap Global same-store sales -7%, Banana Republic -4%, Old Navy Global -7%. Gap partly blames Easter holiday timing (it's in April this year, was in March last year) for the weakness.
- Q1 gross margin is expected to see a bigger Y/Y drop than the one seen for Q4 GM. Opex is expected to remain flat. However, Gap is affirming guidance for 2014 EPS of $2.90-$2.95.
Apr. 9, 2014, 11:09 AM
- Fast-forward companies have the scale to continue to put the pricing hammer to teen retailers (AEO, ARO, ANF, GPS, PSUN, ZUMZ, EXPR, BKE), according to analysts.
- Though the group has been shifting strategy to align closer to the new styles and pricing points that teenagers want, fast-fashion giants such as Hennes & Mauritz (HMRZF), Fast Retailing (FRCOY), and Inditex (IDEXY) appear to be at least a step ahead.
- What to watch: Critical to the successful transition of any teen retailer toward a fast-fashion model will be the ability to retool supply chains and cut down manufacturing turnaround times. Gap might have the edge in this area..
Apr. 7, 2014, 7:26 AM
- Gap (GPS) thinks it has the largest opportunity in China with its Old Navy brand.
- One of the retailer's strategies with the Old Navy roll-out in China is to start with a broad assortment and evolve its inventory based on consumer preferences.
- Eye on the prize: Apparel sales in China are expected to reach a whopping $156B by 2017.
Mar. 26, 2014, 1:08 PM
- Levi Strauss says it will cut 800 jobs in a cost-cutting move.
- The private company says it will save as much as $200M in annual costs after the job reductions are enacted.
- The development is interesting in light of the stance of many apparel retailers (AEO, ARO, ANF, LB, GPS, ZUMZ, EXPR, GES) that their recent shortfall in sales and traffic is a temporary weather-related issue. A 20% cut in its work force by Levi Strauss is no ray of sunshine for the outlook on the industry.
Mar. 20, 2014, 9:04 AM
- Gap (GPS) is in focus after Creative Director Rebekka Bay lands on the cover of the new Bloomberg Businessweek.
- The company stands accused of losing its "casual chic" cachet as its global scale blunted some of its fashion sensibilities.
- Bay's first line of products received good reviews, but ran up against a winter chill in the U.S. which made consumer response hard to gauge.
- Her spring line could tip off if she can deliver the right mix of fashion and pricing for Gap brands.
Mar. 19, 2014, 9:22 AM
- Retail analysts are still buzzing over the 0.3% drop in apparel and clothing prices reported by the Department of Labor yesterday.
- The drop works out to 3.6% on an annualized basis and came during a month when prices are supposed to snap back from their holiday promotional fervor.
- Related stocks: ARO, ANF, AEO, ZUMZ, PSUN, BKE, EXPR, WTSL, TLYS, CACH, GPS, LULU, LB, ANN.
Mar. 12, 2014, 1:24 PM
- Apparel stocks are getting roughed up a bit after Express is the latest retailer to come in with a profit warning for Q1.
- The winter storms and holiday promotions that plagued December and January sales totals set the tone for the sector early in the quarter, but concerns are deepening that the promotional atmosphere will be tough to shake off as traffic trends stay weak into March.
- Notable decliners: Lululemon (LULU) -3.7%, Aeropostale (ARO) -2.3%, American Eagle Outfitters (AEO) -2.9%, Gap (GPS) -1.9%.
Mar. 12, 2014, 12:46 PM
- President Obama paid a surprise visit to a Gap (GPS -1.8%) store in New York City yesterday and spent a reported $150 on his wife and kids.
- The retailer was rewarded after striking out on its own to raise the minimum wage for 65K of its employees to $10.10 per hour.
- Most retailers are fighting for a more modest minimum wage hike from the current $7.25/hour level than what Gap instituted.
Mar. 6, 2014, 6:14 PM
Mar. 6, 2014, 5:40 PM
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