VF Corp (VFC) 2013 Review & Stocks that I am selling or have already sold

Company Highlight---Stocks that I am selling or have already sold

     

VF Corporation is the world’s largest apparel maker and distributor. It is  a leader in jeanswear, sportswear, imagewear and workwear. Its brands include Lee, Wrangler, Jansport, Nautica, The North Face, Vans, Napaplin, Timberland, John Varvatos and Reef. The company has grown its profits and dividend at a 10-11% rate over the last 10 years earning a 15-18% return on equity.  It has raised its dividend every year for the last 20 years. Despite tough conditions in many of its product categories in 2009, management negotiated this period with barely a hiccup and set the company on a course to continue to grow earnings by:

(1) the strength of VFC’s brand management strategy provides a competitive advantage with regard to distribution as well as benefiting it tough economic periods,

(2) its long history of manufacturing and engineering expertise produces cost and service benefits,

(3) a successful acquisition program focusing on companies with global growth opportunities. 

Negatives:

(1)        its large international business exposes it to the vagaries of foreign laws and regulations as well as currency fluctuations,

(2)        intense competition,

(3)        a customer base that remains sensitive to economic conditions.

VFC is rated A by Value Line, has a 22% debt to equity ratio and its stock yields 1.8%.  Its strong cash flow should allow for increasing its dividend, stock buy backs and acquisitions. 

Statistical Summary

                 Stock      Dividend         Payout      # Increases   

                Yield      Growth Rate     Ratio       Since 2003

VFC            1.8%           17%            30%             10

Ind Ave       1.2               6                20               NA  

                 Debt/                        EPS Down       Net        Value Line

                 Equity         ROE      Since 2003      Margin       Rating

VFC          22%            21%            1                 11%           A

Ind Ave     31               14              NA                8              NA

     Chart

            Note: VFC stock made great progress off its November 2008 low, quickly surpassing the downtrend off its July 2007 high (straight red line) and the November 2008 trading high (green line).  Long term, the stock is in an uptrend (blue lines).  Intermediate term, it is in an uptrend (purple lines).   The wiggly red line is the 50 day moving average.  The Dividend Growth and High Yield Portfolios own a 50% position, having Sold Half in late 2011.  VFC’s stock’s strong performance is a perfect example of why our strategy calls for only Selling Half---allowing our profits to run as long as the company continues to meet the quality criteria for inclusion in our Universe.  The upper boundary of VFC’s Buy Value Range is $66; the lower boundary of its Sell Half Range is $160.

http://finance.yahoo.com/q?s=VFC

10/13