Sunday, October 22, 2006

LIZ - Liz Clairborne, Inc.

Liz Clairborne provides upside potential with 5 year DCF model - adding to portfolio.


Company Background: Liz Claiborne, Inc. engages in the design, marketing, and retail of women's and men's apparel, accessories, and fragrance products worldwide. It offers junior's, men's, and women's sportswear, jeanswear, and activewear; jewelry and cosmetics; bath and body-care products; and accessories, including handbags, wallets, and belts. The company also offers women's and men's outerwear, footwear, and watches; women's intimate apparel, legwear, neckwear, sleepwear/loungewear, swimwear, dresses and suits, bridesmaid dresses, and accessories; men's accessories, shirts, pants, sleepwear/loungewear /underwear, socks, and tailored clothing; and men's and boy's neckwear; children's apparel, legwear and socks, school uniform, shoes, and swimwear. In addition, Liz Claiborne offers table linens, tailored clothing, and window treatments, as well as provides decorative fabrics, blankets and throws, furniture, games and toys, and tabletop products. Additionally, it offers optics, sunglasses, stationery/paper goods, home fragrance, and home storage products. As of December 31, 2005, we operated a total of 338 specialty retail stores, 646 concession stores. Liz Claiborne was founded in 1976 and is based in New York City.



Sales & Revenue Stablitity:

Company shows financial stability over the last 5 years with revenue and income growth rates of 5.8% and 6.4%, respectively. Net Income Margin has been on a slight decline from 2004.

Stock Performance:

5 year stock price chart shows steady growth with nice annual returns.


Yield Summary: Free Cash Flow yields are averaging ~8.4% over the last 5 years, with the current US 10-year note at 4.79%. Company has distributed a dividend in the previous 5 years, with a yield average of 0.9%.

Valuations:



Sources:

Company website, Yahoo Finance, Barchart.com

2 comments:

David said...

I've owned this one for a while as well. My only prolem is that M&A is possibly dilutive to value. David Merkel

ETStockideas said...

David - Nice pickup on the M&A dilutive impact with the recent Kate Spade activity. This has been the course of business for LIZ with M&A activities of key brands. Hopefully, the returns are higher than current cost of capital to create value for us (shareholders).