Mens Wearhouse Inc (NYSE:MW)

CAPS Rating: 1 out of 5

A Specialty retailer of men's suits in the United States and Canada.


Player Avatar SharpSEO (68.82) Submitted: 2/3/2009 12:09:29 AM : Outperform Start Price: $10.31 MW Score: +198.56

MW is a true value play (wait, don't leave!). By value, I mean that it's cheap, not "value trap" like GE with mountains of debt. Let's take a look at Men's Warehouse:#1 - Fundamentals: Total assets = $611 million, Total liabilities = $388 million. Price/Sales = .30, Trailing P/E = 8.1, Price/Book = .71.#2 - They sell the same products as the competition, cheaper, and provide good service. Their discount retailer status should serve them well during this crisis.#3 - Very little debt. It's so rare these days, and yet still taken for granted. Highly leveraged companies (cough, GE, cough) are what you wanna steer clear of now.#4 - Beaten down - 20% of MW's float is shorted. It's down from a high of over $50 in 2007 to $11 today. It may have farther to fall, especially with earnings coming up, but expectations are LOW and I think it's a good bet here, having reached what I loosely consider "dirt-cheap" status.#5 - A sustainable dividend of 2.4%. Their dividend payout ratio is only 20%. I love this kind of conservative management in this environment. (Note: their dividend was the same at $50 as it is now, it wasn't the company who got ahead of themselves...)

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