GES. Looks good to me on a lot of value metrics - low d/e, high roe, not outrageous p/e, cash/sh, and a really good 1Q report.
I'm not sure what Guess?,Inc. is. If it's a fashion brand, a jeans fashion brand primarily, then I ask myself how long can it remain in-fashion, on-top with consumers before it falls? It's already been a while (company performance has been excellent (roe) in '08-'10), so where are those changes in fashion going to hit, if ever? 1Q numbers indicate, times are getting even better for GES. (Japanese sales up 50%, for example.)
I'd call GES a value buy but also a speculation too, at current price, even after its rise up from recent lows. As a stock for me, not knowing the fashion/jeans business well enough, I'd want to watch sales trends closely, have my eye on the exit door, and be prepared to fly out at first sign of trouble. Not really my thing, so I'll pass on the stock.
I'll mention I hold ARO which I've added to and may again with the stock down. I face somewhat the same dilemma as with GES. Aeropostale stores do a good business catering to young people for less expensive clothes, financial metrics look okay to me and stock price seems cheap enough -- but if merchandise people mess up, sales will plummet and stock will fall. I'm hoping that'd only be for one season, and young shoppers will come back to the store for a good combo of fashion and price. With a brand like Guess?, if it falls, I wonder if/how it might recover consumer interest. Also, I'm holding SKX (Skecher's), which maybe also might be held hostage to fashion whims. GES just too much for me, given what I already have...I guess. |
