Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, infant- and baby-clothes maker Carter's (NYSE: CRI ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Carter's and see what CAPS investors are saying about the stock right now.
Carter's facts
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Headquarters (founded)
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Atlanta (1865)
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Market Cap
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$1.64 billion
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Industry
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Apparel, accessories, and luxury goods
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Trailing-12-Month Revenue
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$1.75 billion
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Management
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Chairman/CEO Michael Casey
CFO Richard Westenberger
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Return on Equity (average, past 3 years)
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22.5%
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Cash/Debt
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$247.4 million / $236.0 million
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Competitors
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The Children's Place Retail Stores (Nasdaq: PLCE )
Gap (NYSE: GPS )
Walt Disney (NYSE: DIS )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 98% of the 288 members who have rated Carter's believe the stock will outperform the S&P 500 going forward. These bulls include All-Star Jeffreyw, who is ranked in the top 3% of our community, and tekennedy.
Late last year, Jeffreyw was cautiously bullish on Carter's: "High quality kids clothes, but expensive. Profits will depend on pricing power, population growth and disposable income among new parents."
Over the past five years, Carter's has grown its bottom line at a brisk pace of 25.4% annually. That's much faster than listed competitors Children's Place (16.3%), Gap (1.6%), and Walt Disney (11.4%).
CAPS member tekennedy elaborates on the bull case:
A vertically integrated company which sells childrens clothing wholesale, earns royalties from others using their brands or sells through their own retail operations. They have a market leading position in a fragmented market giving them plenty of room to grow. Their scale, brand image and relationships with top retailers have allowed them to earn high returns on investment and the nature of childrens clothing has some fundamental benefits over most apparel companies, reducing risk (less fashion dependent and less prone to economic conditions). Another aspect I like is the potential for turnaround at their OshKosh segment which is backed up by recent results. With a strong balance sheet and fair growth prospects ahead their valuation is very attractive, which should lead to a boring investment which should perform above the S&P for some time.
What do you think about Carter's, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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