I wished to increase my reportable losses for taxes to offset the huge gain in GMCR due to the merger. This position had a loss, therefore I sold it to just to offset the gain.
If not for that, I would have most likely kept it as I believe the company is still solid and that it will rebound at some point.
The price is quite cheap and the business prospects are still quite good. They have a solid competitive position in the apparel industry that will be hard for competitors to match. They own and control most of the production production process for their products and also sell products direct to consumers through  their stores. They are also increasing their e-commerce business.
It seems that many pure play retailers are at an increasing risk of being nonessential. With more consumers making purchases online and a few strong retailers such as Amazon.com and Walmart.com gaining more and more customers and getting increasingly aggressive with keeping costs down including shipping, it will be hard for other retailers to compete both Amazon and Walmart as well as others allow manufacturers to ship them product and they handle the orders and customer service. It seems that with this trend, most other retailers will not be needed and only necessary if they actually own their own products. Hanesbrands seems to be in a good position to sell direct and with their focus on vertical integration – controlling everything from product to sale to the consumer, and doing it well, they should be able to have better margins than their competitors.
The numbers look great too! A good dividend at current prices, low PE and PEG.
The recent price dip makes a great opportunity to get a piece of this strong company. I initiated a position today at $23.76/share. I will consider adding more if it continues to drop.
I sold some shares recently to reduce my exposure to Merchants Bancshares Inc. It has been a large percentage of my overall portfolio and has become more fairly valued, making the margin of safety low.
I do however still maintain a large position in the company and feel it’s a good investment.
The price is quite cheap and the business prospects are still quite good. They have a solid competitive position in the physical store retail industry and lots of opportunity to grow in e-commerce.
The recent drop in price was due to comments made from the company regarding making large investments in e-commerce and employees which will have an impact on earnings for the near future. While the market viewed this as a negative, I feel this is a strong positive. The company needs to have a stronger e-commerce presence in order to maintain their dominance in retail. Using their massive infrastructure they seem to stand the best chance to compete against Amazon.com in e-commerce.
It seems that pure play retailers are at an increasing risk of being nonessential. With more consumers making purchases online and a few strong retailers such as Amazon.com and Walmart gaining more and more customers and getting increasingly aggressive with keeping costs down including shipping, it will be hard for other retailers to compete both Amazon and Walmart as well as others allow manufacturers to ship them product and they handle the orders and customer service. It seems that with this trend, most other retailers will not be needed. I expect to see more consolidation in retail and that Walmart will maintain a solid presence.
The recent price dip makes a great opportunity to get a piece of this strong company. I initiated a position today.