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James Li
James Li
Articles (757)  | Author's Website |

5 Apparel and Sports Footwear Companies Gurus Agree On

Gurus have high conviction in companies specializing in sports apparel

April 08, 2019 | About:

In light of Monday night’s 2019 NCAA Men’s Basketball Championship, the five broadest-owned apparel manufacturing, footwear and accessories companies according to the Aggregated Portfolio of Gurus are Nike Inc. (NYSE:NKE), PVH Corp. (NYSE:PVH), Foot Locker Inc. (NYSE:FL), Gildan Activewear Inc. (NYSE:GIL) and VF Corp. (NYSE:VFC).

Aggregated Portfolio of Gurus feature

The Aggregated Portfolio of Gurus, a Premium feature, allows you to view the stocks that are broadly held by investors tracked on GuruFocus. You can select the industries you wish to focus on by clicking on the “Sectors” tab and then select the desired sectors or industries, as Figure 1 illustrates.

Figure 1

The “Most Broadly Held” model portfolio has outperformed the benchmark in at least the last three years, with a three-year annualized return of 17.79%.

Nike

CNBC columnist Lauren Thomas said a survey by Piper Jaffray found Nike remains “the favorite apparel brand” among teenagers. The survey said 41% of teens turn to Nike for their sneaker shopping, approximately 21% higher than second-place VF Corp.

Nike also received strong conviction among gurus: according to the latest portfolio statistics,17 gurus own shares of the company. Gurus with large holdings in the Beaverton, Oregon-based retailer include Frank Sands (Trades, Portfolio), Spiros Segalas (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).

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Nike said in its fiscal third-quarter report that revenues for the three months ending Feb. 28 increased 11% year over year on a currency-neutral basis, driven by broad-based growth across all global regions, including 3% growth in Greater China, North America and Europe, Middle East and Africa. The company’s consistent revenue and earnings growth over the past 10 years contribute to a GuruFocus business predictability rank of five stars and a profitability rank of 8.

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PVH Corp.

Twelve gurus own shares of PVH Corp., the holding company for brands like Tommy Hilfiger and Calvin Klein. Gurus with large holdings in the New York-based apparel manufacturer include Jim Simons (Trades, Portfolio)' Renaissance Technologies and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates.

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GuruFocus ranks PVH’s profitability 8 out of 10 on several positive investing signs, which include expanding profit margins, consistent revenue growth and a Piotroski F-score of a perfect 9. PVH’s net profit margin is near a 10-year high of 7.73% and outperforms 70% of global competitors.

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Foot Locker

Ten gurus own shares of Foot Locker, a New York-based retailer of athletic shoes and apparel through mall-based stores.

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GuruFocus ranks Foot Locker’s financial strength 8 out of 10 on several positive signs, which include a strong Altman Z-score of 7.33 and debt ratios that outperform over 88% of global competitors. Additionally, Foot Locker’s interest coverage is a robust 66.91, significantly higher than Benjamin Graham’s preference of 5.

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Foot Locker’s profitability ranks 7 out of 10: the company’s operating margin is still outperforming 70% of global competitors despite contracting approximately 2.4% per year over the past five years. Additionally, the company’s business predictability ranks three stars on consistent revenue growth over the past 10 years.

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Gildan Activewear

Ten gurus own shares of Gildan Activewear, a Montreal-based manufacturer of T-shirts, fleece, socks and underwear.

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GuruFocus ranks Gildan’s profitability 8 out of 10 on several positive signs, which include consistent revenue growth and profit margins that are outperforming 86% of global competitors. The company’s business predictability ranks five stars out of five on strong and consistent earnings growth over the past 10 years.

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VF Corp.

Nine gurus own shares of VF Corp., the holding company for brands like The North Face, a manufacturer of outdoor sports wear, and Vans, a manufacturer of skateboarding shoes.

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GuruFocus ranks the Greensboro, North Carolina-based company’s profitability 8 out of 10: operating margins are still outperforming 79% of global competitors despite contracting approximately 1.7% per year over the past five years. Additionally, VF’s business predictability ranks five stars on strong and consistent revenue and earnings growth over the past 10 years.

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Disclosure: No positions.

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About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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