An Insider Bought Shares of G-III Apparel

Page 1 of 2

On January 2nd, Director of Business Development Jeffrey Goldfarb at G-III Apparel Group, Ltd. (NASDAQ:GIII) bought 3,000 shares of the stock at an average price of $33.82. The company primarily provides women’s and men’s apparel and accessories. G-III has a market capitalization of about $690 million; however, an average of about 180,000 shares have been traded per day over the last three months and combined with the current stock price that yields over $6 million in daily dollar volume. On average, stocks bought by insiders tend to beat the market, though this isn’t always the case and so it’s important to do further research on these stocks (as would be the case for the results of any screen).

The third quarter of G-III’s fiscal year ended in October 2012. Revenue was up 7% compared to the same period in the previous fiscal year, led by wholesale licensed goods and retail. Wholesale non-licensed goods saw slightly lower sales, but that division is much smaller than the licensed goods business and so the decline was easily offset. Thanks in part to COGS expenses being held down, operating profits rose 10% and net income increased at a similar rate. A similar pattern emerges if we look at the first nine months of the fiscal year: a 9% increase in sales, with wholesale licensed goods being responsible for most of the gain in absolute terms, and a 9% rise in operating income.

GOTHAM ASSET MANAGEMENT

Even with what appears to be fairly good business conditions, the market is quite pessimistic on G-III Apparel Group, Ltd. The stock trades at only 13 times trailing earnings, a level which we’d generally expect to correspond with very low growth rates, and even at its current pricing 15% of the outstanding shares are held short. Analyst expectations, however, are for growth to continue: the forward P/E multiple is 10 and the five-year PEG ratio is 0.6. Between these attractive valuation metrics and the insider purchase, we think that the stock is a potential value play.

Value investor Joel Greenblatt initiated a small position in G-III Apparel Group, Ltd. during the third quarter of 2012. Greenblatt is the author of a number of investment books including You Can Be A Stock Market Genius (find more of Greenblatt’s stock picks). Chuck Royce’s Royce & Associates, a fund which tends to focus on small-cap and mid-cap stocks, was also buying the stock during the quarter and closed September with 1.9 million shares in its portfolio (see Royce’s favorite stocks). Scopia Capital, which is managed by Matt Sirovich and Jeffrey Mindich, was the largest holder of the stock in our database of 13F filings from hedge funds and other notable investors, with slightly more shares in its portfolio than Royce had. Check out more stocks Scopia owned.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!