Gildan Activewear Inc. (GIL.TO)

Acquiring American Apparel. Gilden has been a really good operator, and it has been hard to get into a multinational company listed on the Canadian exchange. They’ve managed to have a good reputation in terms of not using slave labour, etc. and have great penetration in the marketplace. Whether this acquisition is going to work for them are not he is going to wait and see. He is going to watch and see what the news flow is, before he does anything.

A fairly, highly valued stock. It has been growing nicely, but when they get to the stretched end of their valuation range, he backs away. Wouldn’t rush out to buy this.

This is a good time to buy this, especially on the recent pullback. A couple of years ago they were earning an 18% ROC, and then they made a big investment and there was a bit of lag in their cash flow. The Return dropped, but the street was pretty smart in seeing through that, but in his data, that gives him a little bit of a pause. The return went down to 6% but is now up to 13% and seems to be climbing back.

Model price is $37.90. It is coming back to the bottom of the zone, EBV +4. Watch it here. $25.44 would be were to buy it.

He is looking at this quite closely. It has underperformed recently, but they are very smart allocators of capital. Have great warehouses and a great infrastructure base. They are subject to commodity prices that they can’t control. Generating lots of free cash which they can use to expand their moat, distribution and infrastructure.

(A Top Pick Feb 25/16. Up 13.72%.) He still likes this. Manufacturers underwear, socks and every day active wear. Not everybody goes to the high end every time.

It has been trading in a beautiful range for the last 6 years. The earnings have not been kept pace with the stock price and earnings. He would be concerned about this one from here.

A premier company, but hasn’t done much over the last year. Has built a good base and he can see it going up from here. They are extremely successful at what they do. Good management. Dividend is not that exciting.

This is a real wonder company, in the sense that in this day and age, who would think that a garment company could make money. He gives management a tremendous amount of credit, but you have to recognize that they are rowing against a very strong current, and will continue to do so.

(Market Call Minute) Has been off recently and we had a bounce back. 10 of their clients are 70% of revenue. He likes the name because of international expansion.

A global play on T-shirts. Low input costs are a driver for the business due to low cotton prices. They have reduced their own overhead cost of production.

This has sold off a lot since the beginning of the year. They report in a couple of weeks and thinks the numbers are going to be a little bit light. You are looking at about $1.70 for next year, however in a few years you could see earnings approach $2.50 US. Substantial earnings growth because they are investing heavily in new capacity. Have dominant market share in the areas they are in, and that should increase, especially as they penetrate the retail market. Can see this growing 15%-20% in the next few years. Dividend yield of 1.11%.

(A Top Pick Dec 8/14. Up 37.01%.) Predominantly US in their earnings and revenues. Cotton prices have cooperated. Have moved up from just being a maker of T-shirts, underwear and socks into a brand of their own. They have a near-shore operation so that they don’t do things in Asia, which he thinks is an advantage. Still likes.

(Top Pick Dec 8/14, Up 34.13%) US exposure focused on manufacturing. Cotton prices have come down quite a bit. It can still move along okay.

Likes this company. Recent numbers were somewhat of a disappointment, and the markets reacted accordingly. He would watch this to see if it goes any lower. The multiples are reasonably rich and there is no dividend to speak of, so it is a growth stock. They have done extremely well over the years. Price of cotton has been better lately, so they should do okay. They are in a growth period and there may be a misstep or 2 along the way. Long-term, he thinks it is a great stock. Watch it over the next week or so to see if it gets any weaker and if there is any significant buying, so you can step back in yourself.