Why Guess? 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, apparel retailer Guess? (NYSE: GES  ) has earned a respected four-star ranking.

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

Guess? facts

 

 

Headquarters (founded)

Los Angeles (1981)

Market Cap

$2.3 billion

Industry

Apparel retail

Trailing-12-Month Revenue

$2.7 billion

Management

Co-Founder/Chairman Maurice Marciano

Co-Founder/CEO Paul Marciano

Return on Equity (average, past 3 years)

22.3%

Cash/Debt

$335.9 million / $10.2 million

Dividend Yield

3.0%

Competitors

Abercrombie & Fitch 

Gap 

Ralph Lauren 

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

On CAPS, 91% of the 760 members who have rated Guess? believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star JohnCLeven, succinctly summed up the Guess? bull case for our community:

Yes, clothing is not exactly the most profitable business, and yes [Guess?'s] growth has been slowing, but with the sky high [return on capital], very low valuation, and two managers [whose] interests are uncommonly aligned with shareholders ... I'm going to pick [Guess?] anyway. Add in the 3% dividend yield, and the fact that [Guess?] is selling for a slight 6% discount to their Graham Number which is around $28 … and I think you have a pretty solid long-term pick.

If you want market-beating returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Guess? may not be your top choice.

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