Today’s Daily Alert features a value-priced retailer from the Cabot Benjamin Graham Value Letter.
“The Men’s Wearhouse, Inc. (MW) is a leading specialty retailer of men’s tailored business attire and tuxedo rentals in the U.S. and Canada. The company’s retail segment consists of the 1,239 Men’s Wearhouse stores in the U.S. and Moores Clothing for Men stores in Canada. Men’s Wearhouse features designer, brand name and private label ‘wear-to-work’ apparel, including ‘big and tall’ clothing, at very competitive prices. Sales associates provide customers with assistance and advice on apparel needs. All Men’s Wearhouse stores offer tuxedo rentals.
“The company also offers complementary products and services including a limited number of Men’s Wearhouse Cleaners dry cleaning and laundry facilities. The company is also pursuing opportunities in corporate uniforms and workwear clothing. Increased demand for men’s apparel, especially big and tall, will push sales ahead by 7% and EPS by 15% during the next 12-month period ending 7/31/13 despite the slow economy in the U.S. At 10.8 times my forward 12-month EPS estimate of 2.95, MW shares are undervalued. The company has a clean balance sheet with no debt. I expect MW’s stock price to reach my 53.77 Minimum Sell Price within one to two years. Low Risk; 2.2% Yield. Maximum Buy Price 35.32”
- J. Royden Ward, Cabot Benjamin Graham Value Letter, November 2012