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Strategies & Market Trends : Value Investing

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To: cfimx who wrote (11610)	12/18/2000 1:20:39 PM
From: Bob Rudd	Read Replies (1) of 78525

Twister RL: I suspect RL has significant brand strength but the price is/was too high - currently EV/EBITDA is 15.9 vs ANF 6.8 despite higher growth expected for ANF: 22% vs 13% for RL. Maybe this was onetime hot IPO that came out too high [I haven't studied RL, so my impressions may be naive & superficial]. My contention with Brands is to buy them 'on sale' where you get a substantial portion of the brand value for gratis - even if estimates for growth prove to be 50% too high, 14% instead of concensus 22%, this could still kick out 18+% annual return based on conservative PE OF 14. At the same time, I recognize that I have no edge when it comes to recognizing and forecasting fashion trends so my positions won't be large.

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