On Monday, Lululemon Athletica (LULU) CEO Christine Day announced that she will step down after leading the company for the past five years. Tuesday articles from Forbes and the Financial Post both highlight analysts’ uncertainty towards the athletic wear company’s future in the wake of the announcement. Day’s departure is the latest challenge for Lulemon, following the March recall of many of the brand’s Luon yoga pants and the subsequent departure of Chief Product Officer Sheree Waterson.
With so much of this week’s attention focusing on the haziness of Lululemon's future, we wanted to find apparel stocks showing strong signs of investor optimism.
To do this we screened for stocks with bullish sentiment from institutional investors as illustrated by significant net institutional purchases over the last quarter comprising at least 5% of share float. These purchases indicate that institutional investors, such as hedge fund managers and mutual fund managers, expect these names to outperform into the future.
Do you think these apparel stocks have a bright future? Use this list as a starting point for your own analysis.
1. Columbia Sportswear Company (COLM, Earnings, Analysts, Financials): Engages in the design, development, sourcing, marketing, and distribution of outdoor apparel, footwear, accessories, and equipment in the United States, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and Canada.
Market cap at $2.08B, most recent closing price at $60.68.
Net institutional purchases in the current quarter at 740.4K shares, which represents about 5.71% of the company's float of 12.96M shares.
In the first quarter of 2013, Columbia Sportswear reported 5% year-over-year growth in revenue to a record $348.3 million.
Market cap at $9.02B, most recent closing price at $111.28.
Net institutional purchases in the current quarter at 4.5M shares, which represents about 5.66% of the company's float of 79.57M shares.
This week, PVH reported its second quarter earnings, and its revenue increased by 33.82% to $1.91 billion from the same quarter last year.
Market cap at $1.06B, most recent closing price at $6.34.
Net institutional purchases in the current quarter at 26.3M shares, which represents about 22.58% of the company's float of 116.49M shares.
The company reported $459 million in revenue during the second quarter of 2013, reflecting a 6.7% decrease from $492 million a year ago. Quiksilver is in the midst of a profit improvement plan that includes divesting non-core brands, liquidating extra inventory, and decreasing its product offering.
4. Rocky Brands, Inc. (RCKY, Earnings, Analysts, Financials): Designs, manufactures, and markets footwear and apparel under the Rocky, Georgia Boot, Durango, Lehigh, Mossy Oak, and Michelin brand names.
Market cap at $100.39M, most recent closing price at $13.35.
Net institutional purchases in the current quarter at 461.9K shares, which represents about 7.27% of the company's float of 6.35M shares.
During the first quarter of 2013, Rocky Brands' reported $53.7 million in revenue, an increase of 0.69% from the first quarter of 2012.
(List compiled by Mary-Lynn Cesar)
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