Leggett & Platt
Ford Motor Cred
Toyota Motor Co
- Though potential gain appears to be alluring, the probability of upside trade gains are limited.
Wacoal Holdings Corp. (ADR) (Nasdaq:WACLY)
Wacoal Holdings Corp. is the world's largest manufacturer of intimate apparel and is based in Japan. The company operates in Japan, Hong Kong, Singapore, France, the U.S. and the U.K. As of March 31, 2011, it operated 123 stores, including 16 factory outlet stores, as well as 23 Peach John retail stores.
I take a bearish stance on the stock as the company couldn't meet its 3-year medium-term management plan, which set out net sales of ¥180 billion (for year ended March 2010) and operating income of ¥15.3 billion as numerical targets for the fiscal year. The company couldn't meet the target even in the year ended March 2011. I don't think the company would be able to do that even in fiscal 2012/13.
Leggett & Platt Inc. (NYSE:LEG)
It is a diversified manufacturer that conceives, designs and produces a wide range of engineered components and products that can be found in most homes, offices, retail stores and automobiles. LEG's business is organized into five business segments. Residential furnishings (52 percent of 2010 sales; 54 percent in 2009) consists of bedding, home furniture and consumer products, and fabric and carpet underlay. The commercial fixturing and components segment (16 percent; 16 percent) consists of fixture and display and office furniture components. Industrial materials (15 percent; 15 percent) consists of wire and tubing, while specialized products (18 percent; 15 percent) consists of automotive, machinery and commercial vehicles.[Default U1]
I shun the stock as I believe it is overvalued and that it will significantly underperform its industry. Market correction could produce significant losses.
Ford Motor Company (NYSE:F)
Ford is the second largest U.S. motor vehicle manufacturer. It produces cars and trucks, and many of the vehicles' plastic, glass and electronic components, and replacement parts. It also owns a 3.5 percent stake in Mazda Motor Corp. Financial services include Ford Motor Credit (automotive financing and insurance) and American Road Insurance Co.
I wouldn't recommend the stock until the company resumes dividend payments. The recent price losses could mean the company is not progressing well on renewing contract talks with the United Auto Workers.
Toyota Motor Corporation (ADR) (NYSE:TM)
Toyota Motor is the world's largest vehicle manufacturer based on sales and production volume. It is usually the most profitable automotive company based on net income. Each Toyota Motor ADS represents two shares of common stock. However, these strengths are partially offset by anticipated deterioration in the company's financial performance and potential erosion of its market share due to extended cuts in production resulting from shortages of parts following the earthquake and tsunami of March 11, 2011.
Plans by Toyota Motor Corp.'s Australian operations to launch a new model Camry could be delayed because of strike action by workers over a pay dispute.
Guess? Inc. (NYSE:GES)
Guess? Inc. designs, markets, distributes and licenses its lifestyle collections of contemporary apparel and accessories for a style-conscious 18-to-32-year-old target audience of men and women around the world. In addition to wholesale and retail distribution channels, GES operates in 67 countries via its licensing and distributor partnerships. Apparel and accessories design teams are located in California in the U.S., and in Florence and Bologna, Italy. As of July 30, 2011, GES operated 490 stores in the U.S. and Canada and 218 stores in Europe, Asia and Latin America; licensees and distributors operated another 757 stores outside of the U.S. and Canada.
I think the stock will take a hit as it is likely to underperform its industry significantly. [Default U2]
Cherokee Inc. (Nasdaq:CHKE)
It is a global marketer and manager of a portfolio of lifestyle brands it owns or represents. It licenses the Cherokee, Sideout and Carole Little brands and related trademarks and other brands in multiple consumer product categories and sectors. As of January 29, 2011, the company had 30 continuing license agreements covering both domestic and international markets.
CHKE's EPS growth over the last ten-year period is unattractive at -8.9%. It is currently trading at a P/B ratio of 7.92.
Liz Claiborne Inc. (NYSE:LIZ)
Liz Claiborne Inc. (LIZ) engages in the design and marketing of a range of apparel and accessories worldwide. The company designs and markets a global portfolio of retail-based premium brands, including Juicy Couture, Kate Spade, Lucky Brand and Mexx. It also has a group of department store-based brands with consumer franchises, including the Liz Claiborne and Monet families of brands, Mac & Jac, Kensie, Dana Buchman, and the licensed DKNY Jeans, DKNY Active and DKNY Men's brands. LIZ operates in three segments: domestic-based direct brands; international-based direct brands; and partnered brands.
Poor operating performance, weak credit metrics (current ratio of 0.92; and long-term debt of $548.0 million vs net current assets of negative $52.7 million), make me take a bearish stance. The company operates in a highly competitive apparel industry and is subject to fashion risk.