May 25, 2011
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of baby clothier Carter's (NYSE: CRI ) are up more than 14% as of this writing thanks to a strategic investment from Boston private equity firm Berkshire Partners LLC.
So what: Berkshire disclosed in a Securities and Exchange Commission filing a series of investments that amount to a 13% stake in the company. In no other publicly traded position does Berkshire control even 10% of the shares outstanding, though its 9.4% stake in TransDigm Group (NYSE: TDG ) comes close.
Now what: Fools tend to like Carter's, granting the stock a four-star rating in CAPS, while my colleagues at Motley Fool Hidden Gems like TransDigm. Is there enough commonality here to make Carter's a verifiable diamond in the rough? Berkshire seems to think so, but the stock isn't cheap trading for 17 times earnings. Tread carefully if you choose to invest.
Interested in more info on Carter's? Add it to your watchlist.