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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Susan G who wrote (26304)	3/6/1999 12:55:00 AM
From: Jenna	Read Replies (1) \| Respond to of 120523

The entire week's watch lists. Newcomers to the thread and new subscribers please check them out and check the 'track records' through the posts from the last week. For a more thorough evaluation, please check the newsletter which was posted a earlier this evening. Perhaps this will answer some of the e-mail about intraday updates, the coding system and our lists. marketgems.com marketgems.com marketgems.com marketgems.com marketgems.com Here is an article posted today in TheStreet.com about Warnaco one of the picks from March 1. Stock Mart: Warnaco By Suzanne Kapner Senior Writer Linda Wachner, Warnaco's (WAC:NYSE) chairwoman and chief executive, is letting very little come between her and her Calvins. In its most recent fiscal year ended Jan. 2, Warnaco sold some $900 million of Calvin Klein sportswear, undergarments and accessories, which accounted for 47% of Warnaco's $1.95 billion in total sales. That makes Warnaco one of the only ways for fashion-minded investors to get a piece of the closely held Calvin name. The buck doesn't stop with Calvin. Warnaco also sells sportswear under the Chaps by Ralph Lauren name, and it has a lucrative intimate apparel business under the Warner's, Olga and Fruit of the Loom names. Warnaco claims one in every three women wear its bras and one in every four wear its panties -- not bad for items that most women purchase in multiple quantities. With the stock trading at closeout prices by almost any measure, some investors say Warnaco is a better bargain than Macy's One Day Sale. "It's absolutely a value play," says Tom Gruber, an analyst with T. Rowe Price, which owned 3.9 million shares of Warnaco as of Sept. 30, the most recent information available from data tracker Technimetrics. New York-based Warnaco has taken its share of lumps in recent quarters. The collapse of Asia and Russia crimped fourth-quarter sales, which declined by 2.2% to $548 million. And Warnaco has a penchant for taking restructuring charges, which makes it more difficult for investors to get a good handle on a company's true earnings. Investors are leery of restructuring charges because they create the possibility for management to artificially boost earnings by classifying ongoing expenses as one-time events. But unlike companies that simply restructure existing businesses, most of Warnaco's charges have resulted from acquisitions that required streamlining. Warnaco also has taken charges to close facilities as it moves the bulk of its factories offshore -- a strategy considered necessary by most U.S. manufacturers that want to remain competitive. "Nobody likes to see a lot of restructuring charges at a company, and they did impact the multiple of the stock," Huber concedes. But he adds: "The valuation is attractive by almost any measure. What you're paying takes into account any concerns." Warnaco is trading at just 8.7 times the First Call consensus estimate of $2.63 for its current fiscal year, a 16% increase over the prior year. The average Standard & Poor's 500 stock, by comparison, is trading at 25 times 1999 earnings, which analysts expect to grow about 17%, according to First Call. Price-to-sales, another value measure when less than 1, is 0.70. Most recently, one of the largest concerns has been Asia. Since fears surfaced last summer that the region's problems would hurt the company's sales, Warnaco's stock has slid 46%. It closed up 1/8 at 23 7/8 Friday -- not far above its 52-week-low of 18 1/2.... there's more but I stopped here. [editor's comments] Article reprinted courtesy of TheStreet.com