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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 7/10

vs
industry
vs
history
Cash to Debt 0.08
HBI's Cash to Debt is ranked lower than
69% of the 733 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 3.02 vs. HBI: 0.08 )
HBI' s 10-Year Cash to Debt Range
Min: 0.02   Max: No Debt
Current: 0.08

Equity to Asset 0.30
HBI's Equity to Asset is ranked lower than
65% of the 729 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 0.60 vs. HBI: 0.30 )
HBI' s 10-Year Equity to Asset Range
Min: 0.05   Max: 0.66
Current: 0.3

0.05
0.66
F-Score: 7
Z-Score: 3.73
M-Score: -2.65
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 8/10

vs
industry
vs
history
Operating margin (%) 11.13
HBI's Operating margin (%) is ranked higher than
84% of the 723 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 5.44 vs. HBI: 11.13 )
HBI' s 10-Year Operating margin (%) Range
Min: 3.45   Max: 11.73
Current: 11.13

3.45
11.73
Net-margin (%) 7.14
HBI's Net-margin (%) is ranked higher than
80% of the 723 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 4.33 vs. HBI: 7.14 )
HBI' s 10-Year Net-margin (%) Range
Min: 1.32   Max: 9.7
Current: 7.14

1.32
9.7
ROE (%) 26.86
HBI's ROE (%) is ranked higher than
96% of the 717 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 7.54 vs. HBI: 26.86 )
HBI' s 10-Year ROE (%) Range
Min: 8.4   Max: 68.68
Current: 26.86

8.4
68.68
ROA (%) 8.08
HBI's ROA (%) is ranked higher than
83% of the 726 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 4.23 vs. HBI: 8.08 )
HBI' s 10-Year ROA (%) Range
Min: 1.54   Max: 10.94
Current: 8.08

1.54
10.94
ROC (Joel Greenblatt) (%) 29.53
HBI's ROC (Joel Greenblatt) (%) is ranked higher than
82% of the 724 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 15.03 vs. HBI: 29.53 )
HBI' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: 12.54   Max: 40.79
Current: 29.53

12.54
40.79
Revenue Growth (%) 2.30
HBI's Revenue Growth (%) is ranked higher than
60% of the 538 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 3.90 vs. HBI: 2.30 )
HBI' s 10-Year Revenue Growth (%) Range
Min: 0   Max: 3.5
Current: 2.3

0
3.5
EBITDA Growth (%) 9.20
HBI's EBITDA Growth (%) is ranked higher than
77% of the 447 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 2.30 vs. HBI: 9.20 )
HBI' s 10-Year EBITDA Growth (%) Range
Min: 0   Max: 11.5
Current: 9.2

0
11.5
EPS Growth (%) 18.20
HBI's EPS Growth (%) is ranked higher than
84% of the 427 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 1.00 vs. HBI: 18.20 )
HBI' s 10-Year EPS Growth (%) Range
Min: 0   Max: 62.6
Current: 18.2

0
62.6
» HBI's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q1 2013

HBI Guru Trades in Q1 2013

Jim Simons 125,100 sh (New)
Ronald Muhlenkamp 41,285 sh (New)
Mario Gabelli 108,000 sh (unchged)
James Barrow 3,517,165 sh (-6.88%)
David Dreman 1,065,881 sh (-6.96%)
Joel Greenblatt 201,347 sh (-8.47%)
John Keeley 1,349,940 sh (-9.02%)
Robert Olstein 109,000 sh (-13.49%)
RS Investment Management 1,037,030 sh (-23.79%)
Diamond Hill Capital 106,655 sh (-27.61%)
Steven Cohen 76,671 sh (-63.67%)
Pioneer Investments 213,440 sh (-74.8%)
» More
Q2 2013

HBI Guru Trades in Q2 2013

Joel Greenblatt 209,852 sh (+4.22%)
James Barrow 3,585,509 sh (+1.94%)
Mario Gabelli 108,000 sh (unchged)
Robert Olstein Sold Out
Ronald Muhlenkamp 40,365 sh (-2.23%)
John Keeley 1,263,897 sh (-6.37%)
Pioneer Investments 195,746 sh (-8.29%)
David Dreman 676,414 sh (-36.54%)
RS Investment Management 589,935 sh (-43.11%)
Diamond Hill Capital 52,510 sh (-50.77%)
Steven Cohen 8,543 sh (-88.86%)
Jim Simons 10,700 sh (-91.45%)
» More
Q3 2013

HBI Guru Trades in Q3 2013

Jim Simons 228,200 sh (+2032.71%)
Steven Cohen 30,580 sh (+257.95%)
Joel Greenblatt 225,062 sh (+7.25%)
James Barrow 3,678,366 sh (+2.59%)
Mario Gabelli 108,000 sh (unchged)
David Dreman Sold Out
Diamond Hill Capital Sold Out
RS Investment Management 585,728 sh (-0.71%)
Pioneer Investments 192,841 sh (-1.48%)
Ronald Muhlenkamp 39,635 sh (-1.81%)
John Keeley 1,063,867 sh (-15.83%)
» More
Q4 2013

HBI Guru Trades in Q4 2013

Jeremy Grantham 6,153 sh (New)
Jim Simons 577,600 sh (+153.11%)
Ronald Muhlenkamp 49,115 sh (+23.92%)
Joel Greenblatt 237,901 sh (+5.7%)
Mario Gabelli 108,000 sh (unchged)
Pioneer Investments 182,260 sh (-5.49%)
James Barrow 3,319,002 sh (-9.77%)
RS Investment Management 451,673 sh (-22.89%)
Steven Cohen 23,204 sh (-24.12%)
John Keeley 258,830 sh (-75.67%)
» More
» Details

Insider Trades

Latest Guru Trades with HBI

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
John Keeley 2013-12-31 Reduce -75.67%0.91%$58.67 - $70.95 $ 74.4212%258830
Ronald Muhlenkamp 2013-12-31 Add 23.92%0.12%$58.67 - $70.95 $ 74.4212%49115
David Dreman 2013-09-30 Sold Out 1.2%$52.14 - $64.47 $ 74.4225%0
John Keeley 2013-09-30 Reduce -15.83%0.21%$52.14 - $64.47 $ 74.4225%1063867
David Dreman 2013-06-30 Reduce -36.54%0.48%$44.71 - $52.45 $ 74.4251%676414
Ronald Muhlenkamp 2013-03-31 New Buy0.39%$35.59 - $45.56 $ 74.4290%41285
John Keeley 2013-03-31 Reduce -9.02%0.11%$35.59 - $45.56 $ 74.4290%1349940
Joel Greenblatt 2012-12-31 Add 520.09%0.39%$31.97 - $36.5 $ 74.42116%219988
Joel Greenblatt 2012-09-30 Add 104.66%0.04%$27.89 - $33.87 $ 74.42139%35477
Joel Greenblatt 2012-06-30 New Buy0.04%$24.71 - $29.53 $ 74.42169%17335
Wilbur Ross 2012-03-31 Sold Out 0.23%$22.19 - $29.67 $ 74.42199%0
John Hussman 2011-12-31 Sold Out 0.2%$21.84 - $27.66 $ 74.42202%0
David Dreman 2011-12-31 Add 35.45%0.19%$21.84 - $27.66 $ 74.42202%1456736
Wilbur Ross 2011-09-30 Reduce -50.66%0.41%$23.73 - $33.26 $ 74.42163%174252
John Hussman 2011-09-30 New Buy0.2%$23.73 - $33.26 $ 74.42163%500000
Wilbur Ross 2011-03-31 Add 128.21%0.37%$22.46 - $27.49 $ 74.42197%353152
David Dreman 2011-03-31 Reduce -29.93%0.21%$22.46 - $27.49 $ 74.42197%945733
Mario Gabelli 2011-03-31 Reduce -48.17%0.02%$22.46 - $27.49 $ 74.42197%113000
Premium More recent guru trades are included for Premium Members only!!
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Guru Investment Theses on Hanesbrands Inc

RS Investments Comments on HanesBrands - Nov 05, 2012

HanesBrands (HBI) is a new position added to the Value Fund this past spring. HanesBrands designs, manufactures, and sells primarily branded replenishment apparel goods including t-shirts, bras, underwear, socks and hosiery. Most of what the company sells is staple-ish in nature and, while consumers can defer purchases in the short-run, undergarments are generally the first purchases to be made following a period of deferment. Contrary to popular thinking, brands are important in the undergarment category as consumers are becoming increasingly brand loyal. For example, in men's underwear, we find 80% of overall US sales is represented by national brands (up from 74% just five years ago). HanesBrands is the captain (#1) or validator (#2) in most of the subcategories in which it competes, and the company's brands have shown solid pricing power during recent periods of input price inflation.

HanesBrands was spun-out from Sara Lee in 2006. Prior to the spin, it is our opinion that, Sara Lee maintained a high-cost, uncompetitive domestic manufacturing footprint for Hanes, underinvested in innovation, and basically milked the Hanes unit of its cash flows for reinvestment in other areas within Sara Lee. Since 2006, HanesBrands has:

• Moved its manufacturing to lower-cost geographies including the Caribbean, Central America, and Asia;

• Focused on innovation and reinvestment opportunities such as the C9 Champion line at Target and overseas expansion;

• Pruned and added to its product portfolio with strategic tuck-in acquisitions like Gear for Sports; and

• Paid down debt significantly.

HanesBrands' operating performance during 2011 and the first half of 2012 was negatively impacted by a severe spike in cotton prices, which occurred during late 2010/2011. As a result, margins compressed when price increases were unable to match increased input prices. We established our position in HanesBrands, both as an improving ROIC and a Free Cash Flow (FCF)/de-leveraging story that we expect will play out over the next two years. We forecast ROIC to improve by 200bps (20%) over our investment horizon driven specifically by the following:

• Over the course of the year, HanesBrands will be shutting down its commodity screen printing t-shirt business, which is generating approximately $40 million in operating losses during 2012. Management has decided this business is non-core to the company's branded strategy and is basically ceding market share to competitors Gildan and Fruit-of-the-Loom. Simply shutting this business down will improve operating margins by approximately 100bps and operating profits by 10%.

• Due to the rise in cotton prices in 2011, HanesBrands absorbed a roughly $250 million use of cash due to higher average unit costs (AUCs) for cotton-based inventory carried on the balance sheet. As this high cost inventory works its way off the balance sheet, it will become a major source of cash for HanesBrands – beginning in 2Q 2012 and continuing for the next 12 months.

• Bolstering the ROIC-improvement story is a meaningful deleveraging story. We believe HanesBrands will generate approximately $700-800 million of free cash flow over the course of the next 18 months. We expect HanesBrands will use all of this cash to reduce over 40% of its long-term debt, including a $500 million tranche of notes with an 8% coupon, by the end of 2013. Leverage will be reduced to less than 2X, annual interest expense will fall from $156 million in 2011 to under $75 million by 2014, and the company's financial flexibility will be greatly enhanced to initiate additional shareholder-friendly actions, such as dividends and/or share repurchases.

From RS Investments' RS Value Fund Third Quarter Letter.


Check out RS Investments latest stock trades

Top Ranked Articles about Hanesbrands Inc

A Selling Streak at Dreman Value Management
The updated portfolio of David Dreman, billionaire founder of Dreman Value Management, shows 273 stocks, 13 of them new, with a total value of $1.10 billion, and a quarter-over-quarter turnover of 6%. His portfolio is currently weighted with top three sectors: financial services at 28.2%, industrials at 18.2% and technology at 11.3%. The stocks bought by Guru Dreman averaged a return of 15.67% over 12 months. Read more...
Patience Is Sexy - Contrarian David Dreman’s Top Picks Sizzle
Once an old-fashioned virtue, patience can be exciting when it realizes a gain of 477% as seen by Hanesbrands Inc. (HBI) not that long ago. But only a Guru billionaire investor like David Dreman can persuasively extol the virtues of patience and make it look vastly appealing as evidenced by his top holdings. Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 22.90
HBI's P/E(ttm) is ranked higher than
51% of the 579 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 18.70 vs. HBI: 22.90 )
HBI' s 10-Year P/E(ttm) Range
Min: 4.96   Max: 48.11
Current: 22.9

4.96
48.11
P/B 6.02
HBI's P/B is ranked lower than
78% of the 701 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 1.53 vs. HBI: 6.02 )
HBI' s 10-Year P/B Range
Min: 2.45   Max: 159.24
Current: 6.02

2.45
159.24
P/S 1.64
HBI's P/S is ranked lower than
68% of the 741 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 0.86 vs. HBI: 1.64 )
HBI' s 10-Year P/S Range
Min: 0.14   Max: 1.68
Current: 1.64

0.14
1.68
PFCF 13.81
HBI's PFCF is ranked higher than
75% of the 420 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 19.62 vs. HBI: 13.81 )
HBI' s 10-Year PFCF Range
Min: 3.94   Max: 97.75
Current: 13.81

3.94
97.75
EV-to-EBIT 17.39
HBI's EV-to-EBIT is ranked lower than
51% of the 613 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 14.37 vs. HBI: 17.39 )
HBI' s 10-Year EV-to-EBIT Range
Min: 8.4   Max: 21.2
Current: 17.39

8.4
21.2
PEG 2.12
HBI's PEG is ranked higher than
58% of the 314 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 1.77 vs. HBI: 2.12 )
HBI' s 10-Year PEG Range
Min: 0.78   Max: 26.92
Current: 2.12

0.78
26.92
Shiller P/E 37.09
HBI's Shiller P/E is ranked lower than
63% of the 329 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 20.05 vs. HBI: 37.09 )
HBI' s 10-Year Shiller P/E Range
Min: 11.45   Max: 38.07
Current: 37.09

11.45
38.07

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 1.21
HBI's Dividend Yield is ranked lower than
72% of the 497 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 2.08 vs. HBI: 1.21 )
HBI' s 10-Year Dividend Yield Range
Min: 0.31   Max: 0.92
Current: 1.21

0.31
0.92
Dividend Payout 0.18
HBI's Dividend Payout is ranked higher than
83% of the 398 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 0.34 vs. HBI: 0.18 )
HBI' s 10-Year Dividend Payout Range
Min: 0.19   Max: 0.19
Current: 0.18

Yield on cost (5-Year) 1.20
HBI's Yield on cost (5-Year) is ranked lower than
72% of the 517 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 2.19 vs. HBI: 1.20 )
HBI' s 10-Year Yield on cost (5-Year) Range
Min: 0.31   Max: 0.92
Current: 1.2

0.31
0.92
Share Buyback Rate -1.40
HBI's Share Buyback Rate is ranked higher than
63% of the 367 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: -0.60 vs. HBI: -1.40 )
HBI' s 10-Year Share Buyback Rate Range
Min: 0   Max: -1.6
Current: -1.4

Valuation & Return

vs
industry
vs
history
Price/Tangible Book 32.64
HBI's Price/Tangible Book is ranked lower than
89% of the 664 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 1.90 vs. HBI: 32.64 )
HBI' s 10-Year Price/Tangible Book Range
Min: 10.57   Max: 30.82
Current: 32.64

10.57
30.82
Price/DCF (Projected) 2.31
HBI's Price/DCF (Projected) is ranked lower than
58% of the 368 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 1.20 vs. HBI: 2.31 )
HBI' s 10-Year Price/DCF (Projected) Range
Min: 0.56   Max: 2.18
Current: 2.31

0.56
2.18
Price/Median PS Value 2.52
HBI's Price/Median PS Value is ranked lower than
81% of the 688 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 1.10 vs. HBI: 2.52 )
HBI' s 10-Year Price/Median PS Value Range
Min: 0.44   Max: 2.38
Current: 2.52

0.44
2.38
Price/Peter Lynch Fair Value 2.04
HBI's Price/Peter Lynch Fair Value is ranked lower than
61% of the 169 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 1.06 vs. HBI: 2.04 )
HBI' s 10-Year Price/Peter Lynch Fair Value Range
Min: 0.88   Max: 2.38
Current: 2.04

0.88
2.38
Price/Graham Number 5.70
HBI's Price/Graham Number is ranked lower than
85% of the 546 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 1.20 vs. HBI: 5.70 )
HBI' s 10-Year Price/Graham Number Range
Min: 2.67   Max: 5.38
Current: 5.7

2.67
5.38
Earnings Yield (Greenblatt) 5.80
HBI's Earnings Yield (Greenblatt) is ranked higher than
53% of the 665 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 6.90 vs. HBI: 5.80 )
HBI' s 10-Year Earnings Yield (Greenblatt) Range
Min: 4.7   Max: 11.8
Current: 5.8

4.7
11.8
Forward Rate of Return (Yacktman) 13.17
HBI's Forward Rate of Return (Yacktman) is ranked higher than
80% of the 444 Companies
in the Global Apparel Manufacturing industry.

( Industry Median: 7.06 vs. HBI: 13.17 )
HBI' s 10-Year Forward Rate of Return (Yacktman) Range
Min: 3.1   Max: 23.6
Current: 13.17

3.1
23.6

Business Description

Industry: Manufacturing - Apparel & Furniture » Apparel Manufacturing
Compare:VFC, RL, BURBY, SGC, PVH » details
Traded in other countries:HN9.Germany
Hanesbrands Inc., a Maryland corporation is a consumer goods company with a portfolio of apparel essentials including T-shirts, bras, panties, men's underwear, kids' underwear, socks, hosiery, casualwear and activewear. The Company operates in four segments namely Innerwear, Outerwear, Direct to Consumer and International. These segments are organized by product category, geographic location or distribution channel. Innerwear segment focuses on core apparel essentials, and consists of products such as women's intimate apparel, men's underwear, kids' underwear and socks. The Outerwear segment focuses on casualwear products such as T-shirts and shorts, fleece, sports bras and thermal. The Direct to Consumer and International segments focus on activewear products such as men's underwear, kids' underwear, intimate apparel, socks, hosiery and casualwear. The Company's products are marketed under the brand names such as Hanes, Champion, C9 by Champion, Bali, Playtex, Just My Size, L'eggs, barely there, Wonderbra, Gear for Sports, Zorba, Sol y Oro and Rinbros. Its competitors in Innerwear segment include Limited Brands, Inc.'s Victoria's Secret brand, Jockey International, Inc., Warnaco Group Inc. and Maidenform Brands, Inc. Other competitors in Outerwear segment include Gildan Activewear, Inc. and Gap Inc. The Company is subject to U.S. federal, state and local laws and regulations that could affect its business, including those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission and various environmental laws and regulations.

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