27 Best and Worst Fashion Stocks of 2019
Fashion apparel and accessories can be a lucrative investment sector if you research well before and pick the right companies. This sector can be fickle due to not only being affected by traditional underlying forces but also due to consumer taste and trends. A brand that is very popular one year can very well be put aside for another, very quickly, according to what is considered “in”.
Reputation and image is very important for the performance of retail stocks. There are a few metrics that you can use to gauge a brand including same store sales growth and gross margins.
Other risks to consider include the on-going trade war between the US and China that will include a further tariff on $60 billion of goods including categories that will affect Fashion stocks. The new tariffs will come into effect in June.
🛍 Consumer
Canada
RYU Apparel Inc. (RYU-X)
A largely Canadian fitness apparel company that also has a presence in the US. They are strengthening their ecommerce and online presence. They are a fairly new company, trading for under 5 years. Currently, they are in their growth stage.
Opinion about RYU.V: A fairly new start-up company. Management has worked for different apparel companies in the past. Doesn’t follow this…
Stockchase Gildan Activewear Inc. (GIL-T)
A part Canadian and American manufacturer of unbranded clothing. They manufacture branded apparel on behalf of clients and businesses. The latest report has shown that they have great cash flow and are buying back stocks. A dividend increase has also been announced.
Opinion about GIL.TO: This is a staple – apparel. It is one of the largest basic apparel manufacturers in the world now. Their manufacturing foot…
Stockchase Le Chateau Inc. (A) (CTU-X)
A Montreal based specialty retailer. They are known for their contemporary designed clothing. A financing agreement of $1M was announced in February for working capital purposes.
Opinion about CTU.V: Current inventories are selling very well and profits are very large. Stock has been off the map but is now rising. Selling at…
Stockchase Canada Goose Holdings (GOOS-T)
A Canadian luxury winter apparel maker. Their coats are priced in the thousands. It’s a little expensive now with 40x valuation but they have a history of breaking earnings forecasts. They are expanding globally and are enjoying growing sales.
Opinion about GOOS.TO: Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Overall likes the stock. The Japan deal to expand…
Stockchase Reitmans (Canada) Ltd. (A) (RET.A-T)
Brands under them include Reitmans, RW & CO and Penningtons. Tax loss selling affected them but they have been a steady name. They have been closing their worst stores. Some buy this just for the dividend, which is at 5.99%.
Opinion about RET.A.TO: The whole discretionary space is getting a little soft. Chart shows a big downside from July to January followed by a base…
Stockchase Aritzia Inc. (ATZ-T)
A Canadian women’s fashion brand out of Vancouver. They have been experiencing good growth and are expanding in the US where brand recognition is high too. Their online presence is strong and investors are keeping a close eye for its potential.
Opinion about ATZ.TO: The question was on Aritzia or Dollarama taking some of the space left by the bankruptcy of HBC and could Aritzia move back up…
Stockchase United States
Macys Inc. (formerly Federated Department Stores) (M-N)
Big box stores have been facing increased headwinds from ecommerce and changing consumer patterns. Macys has been the better of the bunch in cost reduction and doing online business but there is vulnerability to Amazon and other online competitors.
Opinion about M: He's buying Macy's puts. Downside action is expected at the 24 strike. He owns puts. Expert opinions on Macys Inc. (formerly…
Stockchase Ross Stores Inc. (ROST-Q)
The second largest off-price retailer after TJX. They buy excess inventories from more recognized brands and acts as an outlet. When traditional retail companies aren’t doing well, these companies will do better. It was one of the only stocks to have a positive rate of return in 2008.
Opinion about ROST: All 3 of his top picks have an element of defensiveness to them. Out of 500 companies in the S&P 500, this was the only company…
Stockchase Nordstrom Inc (JWN-N)
A chain of luxury department stores. They have a good presence in online retail and their ecommerce store is one of the best in the luxury space. Investors are expecting another strong earnings report since they have a history of beating expectations.
Opinion about JWN: Better to buy high-end retailers rather than low end. Has geographic power. Expert opinions on Nordstrom Inc (JWN) — buy, sell, or…
Stockchase Chico’s FAS (CHS-N)
A women’s fashion retailer. Sycamore Partners has submitted an offer to purchase the entirety of the business for $3.50 per share. A previous offer for purchase at $4.30 was offered but rejected by the board since they saw the offer undervaluing the company.
Opinion about CHS: Huge earnings growth (25/28%). Trades at 24/25 X earnings. Near its high. Expert opinions on Chico's FAS (CHS) — buy, sell, or…
Stockchase Gap (GPS-N)
A major player in retail with brands such as Old Navy, Gap, Banana Republic under them. They are reporting first quarter earnings on May 30, 2019. They are suffering from the general trend away from brick and mortar stores. A longer-term survivor.
Opinion about GPS: American Eagle is better (he owns it) at a 3% yield and good managers and it just bought a great company, and the stock is getting…
Stockchase Tapestry Inc. (TPR-N)
Coach, Kate Spade and Stuart Weitzman are key labels under Tapestry Inc. They renovated much of their physical stores are starting to see a revival in the Coach brand. The share buyback program is going well as planned.
Opinion about TPR: They are now the american designer company. They over expanded and denigrated the name. Having said that he bought the stock 2-3…
Stockchase DSW Inc (DSW-N)
A footwear retailer. They performed some acquisitions and are opening stores globally. Same-store sales rose more than 5% in the latest report. They have a good history of raising dividends and it currently sits at 4.5%.
Opinion about DSW: Shoe retailer. This is a challenging business. There is lots of competition and more and more online presence. This is a value…
Stockchase Michael Kors Holdings (KORS-N)
They changed their name to Capri Holdings Limited (CPRI-N) in January of this year. They have Versace and Jimmy Choo under them and are looking to bolster their operations through the various brands. Their original brand, Michael Kors, has had trouble growing sales and maintaining status and image.
Opinion about KORS: New Position for him that has done extremely well so far. Affordable luxury segment, competing directly with Coach. International…
Stockchase American Eagle Outfitters (AEO-N)
An American clothing and accessories retailer that focuses on the teen to young adult segment. They are focusing on expanding online retail and investors are beginning to put more confidence behind this company. They have grown 6.2% year-to-date compared to the industry’s 4.3% decline.
Opinion about AEO: Long-term chart shows a downtrend running from 2012 until early this year. As a group, he does not favour them. Not a fan of any…
Stockchase Guess Inc (GES-N)
An apparel and accessories company that has been gaining interest from hedge funds and other investors. They are starting to repurchase their common stock and are redistributing capital. They recently cut their dividends in favour of the buyback plan.
Opinion about GES: Retailer and the catalyst is their international operations. Growing very rapidly. In 2005 20% of revenues came from outside of…
Stockchase Nike Inc (NKE-N)
A spectacular growth story with global presence. Revenues from China grew well and have not been affected as much by the US-China dispute. Consumer confidence must be closely monitored since this company is particularly vulnerable to be hit if it falls.
Opinion about NKE: Has had 4 straight down years. It's historic how managers have destroyed this company. You can't fix it. The new NBA stars don't…
Stockchase L Brands Inc. (LB-N)
Flagship brands under them include Victoria’s Secret and Bath & Body Work. The tariff war has hit these brands particularly hard. It is a high quality brand but is facing increasing pressure from other online retailers.
Opinion about LB: They are in great areas and saw great growth in execution. Better economic numbers and wage growth in the US is positive. LB-N has…
Stockchase Abercrombie & Fitch (ANF-N)
A wildly volatile stock. They recently cut their COO position and some have questioned their accounting practices. A stock to watch but beware and do your due diligence.
Opinion about ANF: Stockchase Research Editor: Michael O'Reilly We reiterate ANF as a TOP PICK. It trades at just under 3x book value and has a PEG…
Stockchase Tiffany & Co. New (TIF-N)
A luxury jewelry and specialty retailer famous for their diamonds and sterling silver. They were also affected negatively due to the US-China trade war since investors worry that diamonds and jewelry will be included in tariffed goods.
Opinion about TIF: Companies that recover from a recession first are 1) suppliers of necessities such as pipelines, telcos and utilities 2) blue-chip…
Stockchase Under Armour (UA-N)
A sports and casual wear manufacturer. They are nearing the end of a three year transformation. They are particularly popular due to the athleisure movement and demand for smart looking workout clothing.
Opinion about UA: Makes great gear, but you need to separate a stock from a product, a company or a management. This is down 53% in one year. They…
Stockchase LuLulemon Athletica (US) (LULU-Q)
A Canadian company trading on the NASDAQ. They have gotten support for their athleisure and fashion forward apparel. The major bulk of their clientele are discerning millennial shoppers looking for good quality apparel.
Opinion about LULU: Investor's cost is $204. The $160 level it's at right now is the same one back in 2018. If he saw further erosion from here,…
Stockchase Urban Outfitters (URBN-Q)
An American multinational consumer goods and apparel company. They announced strong results in the holiday quarter and are expected to announce their Q1 earnings on May 21.
Opinion about URBN: Trades at 15 X next years earnings. Consistant performer. Expects multiple expansion. Expert opinions on Urban Outfitters (URBN)…
Stockchase TJX Companies (TJX-N)
The largest international apparel and home fashion off-price retailer. They change inventory quickly and are good at keeping up with consumer taste. In a recession environment, these types of companies thrive. Their brands include Marshalls, Winners and Home Senses.
Opinion about TJX: (A Top Pick May 12/23, Up 24%) Discount clothing business that is performing well. Owns companies like Winners and HomeSense.…
Stockchase Hanesbrands (HBI-N)
A leading undergarments and athletic apparel manufacturer. They posted the highest quarterly sales growth in eight years for the fiscal year 2018. Champion, one of their brands, has been growing internationally and is expected to continue its expansion.
Opinion about HBI: Has an aversion in general to retail, but if he were going to buy retail stock, he would rather buy a manufacturer. Retail does…
Stockchase Carter’s Inc (CRI-N)
A children’s apparel company that supplies a lot of discount retailers under different names. Earnings were impacted by unfavourable currency rates and soft sales. However, a large majority of mothers shop at their stores and they are opening more stores than they are closing.
Opinion about CRI: 80% of new moms shop at this store. The big push for this company is being able to drive international sales. Right now 90% of…
Stockchase LVMH (Moet Hennessy Louis Vuitton) (LVMUY-OTC)
The biggest luxury-goods company in the world. It’s a good name to be defensive during the US-China tariff war as this is not expected to affect LVMH. High-end retail continues to do well and they are doing a great job with online commerce. A good stock to hold long term.
Opinion about LVMUY: Diversified, high-luxury company. Toll road for high luxury, and that runs through China (1/3 of its customer base). A clean,…
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