Why Regis Is Poised to Outperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, hair-care salon operator Regis (NYSE: RGS  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Regis and see what CAPS investors are saying about the stock right now.

Regis facts

 

 

Headquarters (founded)

Edina, Minn. (1922)

Market Cap

$1.0 billion

Industry

Personalized services

Trailing-12-Month Revenue

$2.2 billion

Management

CEO Daniel Hanrahan (since 2012)

CFO Steven Spiegel (since 2012)

Return on Equity (average, past 3 years)

(5.6%)

Cash/Debt

$218.3 million/$269.0 million

Dividend Yield

1.3%

Competitors

Ratner Companies

Sport Clips

Ulta Salon, Cosmetics & Fragrance (NASDAQ: ULTA  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 87% of the 87 members who have rated Regis believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star kkconway, tapped Regis as a particularly sharp turnaround opportunity: "Divestiture of Hair Club for Men asset looks like a short term catalyst, but it could be a nice play for long term growth. [I]f the new management stops the bleeding at Supercuts salons, they are off to a promising start as of last quarter ."

If you want market-topping returns, you need to put together the best portfolio you can. Of course, despite its four-star rating, Regis may not be your top choice.

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Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 14, 2013, at 4:49 PM, michaelbk001 wrote:

    If Regis is to be successful in 2014 and beyond, they must have a strategy with respect to the Affordable Care Act. With as many employees as there are working for Regis, the cost added to there cost of sales should have a pretty hefty impact on the bottom line. Is there any information on their strategy?

  • Report this Comment On February 27, 2013, at 2:40 PM, rumplemints15 wrote:

    Yea, their strategy is to pay the fine, its way cheaper then having to pay actual cost.

  • Report this Comment On March 01, 2013, at 3:19 PM, michaelbk001 wrote:

    Possibly true, that the fine is the less expensive route. That said, the fine is not deductible, so it is after tax dollars, Regis probably has no less than 5000 plus employees that are full time per the Affordable Care Act. This would in year one add to the cost of sales to the tune of $10M and take the same amount from the bottom line in after tax dollars. That's a pretty hefty addition to payroll costs and would require them to sell a lot more product!

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