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$27.66 0.14 (0.51%)
10/10/2008 4:00 PM

Jos. A. Bank Clothiers, Inc. (JOSB)

CAPS Rating:
***

The Company is a designer, retailer and direct marketer of men's tailored and casual clothing and accessories.

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Avatar EldrehadsPicks (89.08) Submitted: 1/31/08 8:45 AM : Outperform Start Price: $23.77 JOSB Score: 50.02

Yes, there's a reason these shares are down nearly 50% from their 52 week high, but once again it appears to me that Mr. Market is pricing these shares as though the current sales growth rate and net margin rate are going to continue, relatively unchanged, into the future. Given the multi-year history of much more rapid top line growth and a 5 year track record of ever increasing net margins even during periods where the growth rate has slowed, I think both top line growth and net margins will continue to expand – and if I’m right, we should enjoy market-beating returns from here.

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Avatar TDRH (99.98) Submitted: 2/08/08 10:24 AM

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Retail-Consumer Discretionary in a slow/growth recessionary market will underperform the S&P 500.

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Avatar TMFEldrehad (99.99) Submitted: 2/12/08 4:10 PM

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On the whole, as a sector, you may be right (then again, some amount of expectations along these lines are already priced into stocks in this sector). That doesn't mean that every stock in the sector will underperform, however. As of today, JOSB's trailing P/E is less than 9, and this for a business that's still growing.
Buying good companies in temporarily out of favor industries can be a good way to beat the market in the long term. What we'll see over the next year, or two, is anyone's guess. I believe, however, for the patient investor who with a long-term focus who is risk tolerant enough to stomach a potential near-term downturn in this sector, JOSB shares are attractively priced and stand a very good chance of outperforming the S&P over the long term (5+ years).

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Avatar ikkyu2 (99.50) Submitted: 4/13/08 9:29 PM

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Eldrehad,

I've been watching JOSB for about 18 months now - it was sort of an experiment for me, it's the stock I picked to learn how to look at a retailer. Inventory size was a concern for me during the first few months of that analysis but as the months rolled on I've been *very* impressed how management was able to shift their stale goods with sales. (As a customer, I've found that it's easy for me to know about the sales and buy clothes at the sale price, and you can hardly say fairer than that.) And they just posted 13% Internet growth and 4% comps growth on 4/10/08 - and if you haven't noticed, the state of the consumer economy is hardly robust!

Your points about topline growth and marginal profit are well taken and I think everything I've mentioned here points to one thing: good management that is on top of their game and making the numbers work. I'm with you and the greenthumbs on this!

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