Today’s new recommendation comes from Richard Segarra at Ford Equity Research.
“G-III Apparel Group Ltd. (GIII, $34) designs, manufactures and markets a range of apparel, including outerwear, dresses, sportswear, women’s suits and women’s performance wear, as well as luggage and women’s handbags, small leather goods and cold weather accessories.
“As of January 31 2012, the company operated 139 retail stores, of which 135 are Wilsons Leather outlet stores and four are outlet stores under its Andrew Marc brand. ... We project that G-III will strongly outperform the market over the next six to 12 months. This projection is based on our analysis of three key factors that influence common stock performance: earnings strength, relative valuation and recent price movement.
“Earnings strength is very positive. EPS increased from $2.46 to an estimated $2.93 over the past five quarters, indicating an improving growth rate. Analyst forecasts have recently been raised. The company recently reported better than expected results. This indicates an improvement in future earnings growth may occur. ...
“Relative Valuation is very positive. G-III’s operating earnings yield of 8.5% ranks above 83% of the other companies in the Ford universe of stocks, indicating that it is undervalued. [Finally,] price movement is very positive. As of this writing, G-III’s stock price is up 38.0% in the last 12 months (positive), down 5.4% in the past quarter (positive) and down 6.4% in the past month (very positive). This historical performance should lead to above-average price performance in the next one to three months. Strong Buy.”
- Richard Segarra, CFA, Ford Equity Research Report, January 4, 2013