Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice! As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisers prior to making any investment decisions based on information on this website.
Last weekend, I reviewed the week of September 25, 2006. Going a week ahead, let's take a look at the week of October 2, 2006, a week in which I posted a single stock, Guess (GES).
These reviews all assume a 'buy and hold strategy' while in fact I advocate as well as employ a disciplined investment portfolio management strategy which requires to sell declining stocks if they incur small losses, and to sell appreciating stocks in part if they reach stock prices on the upside. The difference between these strategies would certainly affect performance and should be given consideration when reading these reviews.
On October 7, 2006, I posted Guess (GES) when it was trading at $53.89/share. Adjusted for a 2:1 stock split on March 13, 2007, this worked out to a price of $26.95. With GES closing at $40.03 on April 18, 2008, this works out to a gain of $13.08 or 48.5% since posting. I do not own any shares nor do I have any options on this stock.
Let's take a closer look at this company and see if the stock still deserves a spot on my blog! I will share with you why I believe that
GUESS? (GES) IS RATED A HOLD
What exactly does this company do?
According to the Yahoo "Profile" on Guess (GES), the company
"...designs, markets, distributes, and licenses lifestyle collections of apparel and accessories for men, women, and children. The company's products include collections of denim and cotton clothing, including jeans, pants, overalls, skirts, dresses, shorts, blouses, shirts, jackets, and knitwear. It also grants licenses to manufacture and distribute a range of products, which comprise eyewear, watches, handbags, footwear, kids' and infants' apparel, leather apparel, swimwear, fragrance, jewelry, and other fashion accessories."
How did they do in the latest quarter?
On March 19, 2008, Guess? (GES) reported 4th quarter 2008 results. For the quarter ending Februar 2, 2008, the company reported total net revenue of $514.6 million, up 29.9% from $396.2 million reported the prior year. Comparable store sales grew 13.1% during the quarter.
Net earnings for the quarter increased 20.3% to $55.2 million from $45.9 million during the same period the prior year. Diluted earnings per share were up 20.4% to $.59 from $.49 the prior year.
The company beat expectations with these results. Analysts surveyed by Thomson Financial had been expecting earnings of $.57/share on $470 million in revenue.
However, the company lowered guidance for the first quarter of 2009. Analysts had been expecting $.47/share on revenue of $450.6 million. However, Guess now expects earnings between $.44 to $.46 on $445 to $460 million in revenue.
How about longer-term results?
Reviewing the Morningstar.com '5-Yr Restated' financials on GES, unfortunately there is a very incomplete picture present. What we can see is that the company is generating free cash flow, and the balance sheet is solid.
What does the chart look like?
Looking at the 'point & figure' chart on Guess? (GES) from StockCharts.com, we can see the shar appreciation in stock price from a low of $1.75/share in October, 2002, to a high of $56 in October, 2007. The stock has been under pressure recently, along with the entire market, but has stayed well above support levels.
Summary: What do I think about Guess? (GES)?
Actually, except for the weak retail environment that our nation is facing, I still like Guess just fine :). The latest quarter was strong, but the company reduced guidance slightly. The chart looks adequate. Unfortunately, I don't have the longer-term results from Morningstar.
This was a great stock pick for the week. Thus the only pick showed a gain of 48.5% since posting.
If you have any comments or questions, please feel free to leave them on the blog or email me at firstname.lastname@example.org. If you get a chance, be sure and visit my Covestor Page where my actual trading portfolio is tracked (I was doing well until the recent sell-off in VIVO stock), and my SocialPicks page where my stock picks and my blog entries are reviewed since the beginning of 2007. And if you still have some interest, be sure and visit my Podcast page where you can download an mp3 of me discussing one of the many stocks I write about here on the blog.
That's about it for the weekend! Wishing you all a wonderful Monday and a healthy and successful week ahead!
Yours in investing,