Our first recommendation is a children’s apparel retailer, whose share were recently recommended by TheStreet.com. Goldman also upgraded its shares from ‘Neutral’ to ‘Buy’. Our second offering is a sell recommendation on a mutual fund.
Buy: Children’s Place (PLCE)
From Ford Equity Research Report
Children’s Place is a children’s apparel retailer. The company provides apparel, accessories, footwear and other items for children sizes zero to 14. The company designs, contracts to manufacture and sells and licenses to sell merchandise, a substantial majority of which is under the proprietary The Children’s Place, Place and Baby Place brand names.
The company’s merchandise is also available online at www.childrensplace.com. The company classifies its business into two segments: The Children’s Place U.S. and The Children’s Place International. As of Jan 31 2015, the company operated 1,097 stores throughout North America consisting of 963 The Children’s Place U.S. stores and 134 The Children’s Place International stores.
Earnings Strength is VERY POSITIVE. While Children’s Place, Inc.'s earnings have risen from $3.25 to an estimated $4.50 over the past 5 quarters, they have shown acceleration in quarterly growth rates when adjusted for the volatility of earnings. This indicates an improvement in future earnings growth may occur. Earnings forecasts for Children’s Place, Inc. have been increasing recently, which indicates an improvement in future earnings growth. The company has also reported higher earnings than those predicted in earlier estimates. This indicates an ability to exceed analysts’ expectations and the potential for improving earnings growth in the future.
Relative Valuation is POSITIVE. Children’s Place, Inc.'s operating earnings yield of 6.2% ranks above 73% of the other companies in the Ford universe of stocks, indicating that it is undervalued. Ford measures the relative valuation of each company against all other companies in our research universe.
Price Movement is VERY POSITIVE. Children’s Place, Inc.'s stock price is up 8.2% in the last 12 months, up 5.4% in the past quarter, and down 3.7% in the past month. This historical performance should lead to above average price performance in the next one to three months.
We project that Children’s Place, Inc. will strongly outperform the market over the next 6 to 12 months.
Richard Segarra, CFA, Ford Equity Research Report, www.fordequity.com, 800-842-0207, June 3, 2016