FUTop100 Index fares better than S&P, FTSE100 and DJIA

Friday, 30 December 2011

ThFUTop100 Index fares better than S&P, FTSE100 and DJIAe international fashion benchmark index has, in definitive, proved to be a good mirror for the general state of the fashion and apparel market. The FashionUnited Top 100 Index will farewell 2011 a 2.89 per cent higher. Nevertheless, the international fashion benchmark will welcome the new year seeing its position reduced in 133 basic points during the second half of the year, as it dropped from 1,346 points (1-Jul-2011) to 1,273 points (31-Dec-2011).

However, this lost should be compared to those registered by other indexes such as the Dow Jones Industrial Average, which has fallen from the 12,582.77 height it conquered the 1st of July to the border of 12,271, at which it was expected to close the year (and above the 11,577.51 mark it started the year). Meanwhile, the Standard & Poor's 500 index will end down 0.1 per cent at 1,262, marginally up on the year's starting point of 1,257.64.


Finally, trading in Europe on Friday 30th December was fairly quiet with many markets were only trading for half the day. The FTSE 100 index of leading British shares closed up 0.1 per cent at 5,572.28, meaning that it ended the year 5.6 per cent lower, while Germany's DAX ended 0.9 per cent higher at 5,898.35, a 14.7 per cent decline over the year. The CAC-40 in France, which is trading normal hours, was 0.3 per cent higher at 3,138. Despite the rise, it's still looking like it will end the year around 17 per cent lower from where it started at 3,804.78. These compare to the 5,4 per cent that the FU Top 100 lost in the past 6 months. The international fashion benchmark was trading at 1,237.4 points in January (12th Jan), compared to its close on 30th December 2011, date that the FUTop 100 farewell the year at 1,273.14., that is a 2.89 per cent higher than it welcomed the now exiting year. The FashionUnited Top 100 Index is a capitalization-weighted index gathering some of the world largest stock listed apparel companies. All listed companies specialize in the sale of clothing, whether in physical retail stores, wholesale or by e-commerce. They do not necessarily have to be the world largest ones, but the main stock listed firms located in those countries represented in the index with their own weighting based on market capitalization, which is calculated June 30th of each year.

FUTop100 Index fares better than S&P, FTSE100 and DJIA

10 of 100 companies gain over 10 per cent in 6 months

Ten of the hundred quoted companies from the fashion and apparel market listed within the FashionUnited Top 100 Index will farewell 2011 fairly better than they started in July. LIz Claiborne was the stock that gained the most in the last six months (+62 per cent). In line with the sluggish circumstances seen in all markets around the Globe, quoted companies belonging to the Fashion and Apparel Industry have been severely damaged by the recession and the ever decreasing consumer´confidence. This gloom perspective somehow explains how 60 of the Top100 listed stocks declined over 10 per cent in the last 6 months of 2011, as opposed to those 10 of listed stocks that managed to increase their market value (+10 per cent) from 1st of July to 30th December.

American womenswear retailer Liz Claiborne Inc. has topped the top ten gainers of the year within the FashionUnited Top 100 Index by adding +62 per cent between July and December. It is worthy a note to recall though that its stock is currently trading at$8.36 (Rs 449) per share in comparison with the $46.84 (Rs 2,519) per share it held in 2007. Dec 08, 2011 (SmarTrend(R) Spotlight via COMTEX) -- SmarTrend identified an Uptrend for Liz Claiborne (NYSE:LIZ) on October 12th, 2011 at $6.83 (Rs 367). In approximately 2 months, Liz Claiborne has returned 20.79 per cent as of 8th of Decemeber price of $8.25 (Rs 443). In the past 52 weeks t that date, Liz Claiborne share prices have been bracketed by a low of $4.02 (Rs 216) and a high of $9.18 (Rs 493) and are now at $8.25 (Rs 443), 105 per cent above that low price. Over the last five market days, the 200-day moving average (MA) has gone up 0.9 per cent while the 50-day MA has advanced 2.3 per cent.

Second came Oxford Industries Inc (+28 per cent). When the owner of Ben Sherman posted quarter results in early December, the stock was up 58 per cent year-to-date. Oxford Industries Inc.'s (OXM) fiscal third-quarter earnings fell 71 per cent as the repurchase of senior secured notes and other items weighed on the apparel company's bottom line, though adjusted earnings and revenue beat the company's expectations. Oxford boosted again its full-year outlook to $2.30 (Rs 13) to $2.35 (Rs 126) a share for adjusted earnings from continuing operations on revenue of $745 million (Rs 4,008 crores) to $755 million (Rs 4,061 crores). In August, the company had forecast earnings of $2.20 to $2.30 (Rs 118-123) a share on revenue of $735 million (Rs 3,954 crores) to $750 million (Rs 4,035 crores). For the fourth quarter, Oxford expects earnings per share of 50 cents to 55 cents on revenue of $185 million (Rs 995 crores) to $195 million (Rs1,049 crores). Analysts surveyed by Thomson Reuters predicted 48 cents and $184 million (Rs 989 crores), respectively.

Carter's Inc. won the copper medal in the second half of 2011 as its shares gained +26 per cent. It has a market cap of $2.33 billion (Rs 10,485 crores); its shares were traded at around $39.74 (Rs 2,138) with a P/E ratio of 19.39 and P/S ratio of 1.33. Carter's Inc. had an annual average earning growth of 17.3 per cent over the past 10 years. Stocks at Carter's were upgraded in December to buy from neutral by Goldman Sachs, which sees opportunities for gross margin growth. The benefits will come through the children's apparel retailer offsetting higher raw-material costs by raising prices in its wholesale business, which accounts for 50 per cent of sales.

The rest of the top 10 chapter of those companies that have seen the best trading between July and December is as follows: Genesco Inc (+17 per cent), TJX Companies (+17 per cent), True Religion (+15 per cent), NEXT (+14 per cent), The Children's Place Retail(+14 per cent), VF Corporation (+13 per cent), and Charming Shoppes, Inc.(+11 per cent).

At the bottom top they can be found 100 - K-Swiss, that has seen the largest drop with a fall of 75 per cent, and Billabong International (-72 per cent). Other stocks that have struggled in the past six months were Lululemon Athletica (-61 per cent), Etam Developpement S.C.A. (-60 per cent), CHARLES VOEGELE (-59 per cent), or Esprit Holdings (-59 per cent).

In early December and following the analysis of FNNO, K-Swiss crowned the three companies in the Footwear industry with the lowest Enterprise Value (EV) to Sales ratios. EV/Sales gives investors an idea of how much it costs to buy the company's sales and the lower the ratio, the more undervalued the company is believed to be. As reported by Financial News Network Online (FNNO), K-Swiss (NASDAQ:KSWS) was lowest with EV/Sales of 0.27. In the past 52 weeks to 5th of December 2011, shares of K-Swiss have traded between a low of $2.56 (Rs 137) and a high of $13.04 (Rs 701) and are now at $2.76 (Rs 148), which is 8 per cent above that low price. Over the past week, the 200-day moving average (MA) has gone down 2.5 per cent while the 50-day MA has declined 4.5 per cent.

On its own, Billabong International Ltd. (BBG) fell by a record in Sydney trading on Dec 19, after the Australian surf-wear maker said first-half profit may fall as much as 26 per cent and flagged a review of its capital structure. The stock slumped 44 per cent to $2.03 (Rs 109) at the close of trade, the largest drop since it was listed in 2000. The decline cut Billabong’s market value to A$518 million ($514 million) (Rs 2,765 crores), compared with A$1.5 billion (about Rs 7,000 crores) as of the June 30 fiscal year end, reported at the date Bloomberg. Goldman Sachs Group Inc. (GS) has been hired to review all alternatives for Billabong’s balance sheet, with an equity sale "not the preferred path," according to a filing. The review comes "in light of the existing operating environment and the risk for further deterioration," Billabong said in the filing.

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