The Men's Wearhouse, Inc. (MW)

Like the product.

GOOD MEN STORE

good store

2/27/09 Pitch: Upthumb. Earnings 3/11/09, 5:00 PM. Probably will miss its own lowered guidance. Too difficult to cut costs. But it does have low debt. Nevertheless, I can see it going to $7.
Past trades:
11/11/08 Pitch: Downthumb. Earnings 11/19/08, 5:00 PM Consistently underperform. These guys might actually not make it. Closed 11/18/08 @ $10.78 for +9.04 points.
8/18/08 Pitch: Downthumb. Earnings 2008-08-27 5pm MW is like sooooo…. 90's. Seems it can't get its act together. Closed 10/28/08 @ $12.54 for +11.04 points.

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...)

Just a hunch,a well run company.

obsolete business model/product

This one for longer term hold.

The Mens Wearhouse is one of those specialty retailers that offers designer, brand name, and private label merchandise, including suits, sport coats, slacks, business casual, dress shirts, sportswear, outerwear, shoes, and accessories.
This company was founded in 1974 and I can still remember the commercials from when I was a kid. Much like Dave Thomas was the CEO and figurehead of Wendy's, the Mens Wearhouse CEO is equally famous. 57 year old George Zimmer has been the spokesperson, CEO, and veritable mastermind behind the marketing and success of this company from day one. If you've ever heard one of the commercials you'll recognize the all too familiar catch phrase from George himself, "You'll like the way you look, I guarantee it." I don't know about you, but I find comfort in investing in a company where the CEO offers up a guarantee of satisfaction behind their product, especially one that's been around as long as this one.
This company has a fantastic management team backing Mr. Zimmer, and they have significant inside ownership. According to my valuation, if they grow at the industry average, the stock is priced at a nice discount right now, but with a solid business like this I'm looking at this one for the long haul.
Go Long,
Fool On!!!

I work for them lol

tuxedo volume

PRICE/SALES RATIO: [PASS]

The prospective company should have a low Price/Sales ratio. Non-cyclical (non-Smokestack) companies with Price/Sales ratios below 0.75 are tremendous values and should be sought. MW's P/S of 0.51 based on trailing 12 month sales, is below 0.75 which is considered quite attractive. It passes this methodology's P/S ratio test with flying colors.

TOTAL DEBT/EQUITY RATIO: [PASS]

Less debt equals less risk according to this methodology. MW's Debt/Equity of 13.03% is acceptable, thus passing the test.

PRICE/RESEARCH RATIO: [PASS]

This methodology considers companies in the Technology and Medical sectors to be attractive if they have low Price/Research ratios. MW is neither a Technology nor Medical company. Therefore the Price/Research ratio is not available and, hence, not much emphasis should be placed on this particular variable.

PRELIMINARY GRADE: Some Interest in MW At this Point

Is MW a "Super Stock"? YES

PRICE/SALES RATIO: [PASS]

The prospective company should have a low Price/Sales ratio. Non-cyclical(non-Smokestack) companies with Price/Sales ratios below .75 are tremendous values and should be sought.MW's P/S ratio of 0.51 is below .75 which is considered extremely attractive. It passes this methodology's P/S ratio test with flying colors.

LONG-TERM EPS GROWTH RATE: [PASS]

This methodology looks for companies that have an inflation adjusted EPS growth rate greater than 15%. MW's inflation adjusted EPS growth rate of 29.01% passes the test.

FREE CASH PER SHARE: [PASS]

This methodology looks for companies that have a positive free cash per share. Companies should have enough free cash available to sustain three years of losses. This is based on the premise that companies without cash will soon be out of business. MW's free cash per share of 1.23 passes this criterion.

THREE YEAR AVERAGE NET PROFIT MARGIN: [PASS]

This methodology looks for companies that have an average net profit margin of 5% or greater over a three year period. MW, whose three year net profit margin averages 6.96%, passes this evaluation.

SECTOR: [PASS]

MW is neither a technology nor financial Company, and therefore this methodology is applicable.

SALES: [PASS]

The investor must select companies of "adequate size". This includes companies with annual sales greater than $340 million. MW's sales of $2,107.5 million, based on trailing 12 month sales, pass this test.

CURRENT RATIO: [PASS]

The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. MW's current ratio of 2.61 passes the test.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [PASS]

For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that meet this criterion display one of the attributes of a financially secure organization. The long-term debt for MW is $106.9 million, while the net current assets are $406.7 million. MW passes this test.

LONG-TERM EPS GROWTH: [PASS]

Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. MW's EPS growth over that period of 218.3% passes the EPS growth test.

P/E RATIO: [PASS]

The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. MW's P/E of 9.60 (using the current PE) passes this test.

PRICE/BOOK RATIO: [PASS]

The Price/Book ratio must also be reasonable. That is, the Price/Book multiplied by P/E cannot be greater than 22. MW's Price/Book ratio is 1.30, while the P/E is 9.60. MW passes the Price/Book test.

MW has been shorted because of the slowth in the economy. It has good fundamentals and look like they are going to have a good quarter. They'll be in $35 range by the end of the year. At least...

Wedding season!

it seems this is still a take over canidate. The recent $7b is not enough

one bad quarter trashed the stock. Retail will rebound, and along with it, the dominant player in the men's clothing market. People need to interview, and to interview, they need suits, and for suits, it's men's wearhouse.

Based upon our extended forecast, declining Retail Market, and increasingly challenging economic environment...

"You're NOT going to like the way we look" for quite sometime.

(The continued erosion of Consumer Spending (2/3rds of GDP) trumps all else). No more new suit for a good while.

Severely undervalued on a FCFE forecasting basis using very conservative growth estimates.

"You're going to like the way you look"

I'm going to like the way my player rating looks when Men's Wearhouse along with the rest of the retail sector comes back to life.