Irrespective of the Warnaco acquisition, expected earnings growth appears to be robust. 2012 showed EPS of $5.38, and analysts estimate 2013 EPS to be $6.39 and 2014 to be $7.45. Putting a 20.5 times price to earnings multiple (the current P/E) on 2014 earnings estimates, the stock appears undervalued by over 22%. PVH Corp (NYSE:PVH) is one of the top three apparel stocks for 2013 (read about all three).
One of Dell’s big sell-offs was WEX Inc (NYSE:WXS), which had previously been Dell’s fourth largest holding and was 13.7% of MSD’s portfolio. WEX, formerly Wright Express Corporation, provides payment and information management solutions, including its top segment, fleet payment solutions, which provides customers with fleet vehicle payment processing services. It appears that WEX is expensive. WEX is currently trading at a price to earnings ratio of 31 times, which is nearly a 200% premium to the S&P 500 P/E ratio. On the other hand, its 5-year average premium to the S&P 500 is only 87%.
Don’t be fooled
The big news for Michael Dell of late has been his plans to take his prized company, Dell, private. However, I figured it would be worthwhile to take a break from the Dell buyout saga to see where else Michael Dell has his fortune invested. DineEquity Inc (NYSE:DIN) is a big bet on a rebounding casual dining market, while Michael Dell’s bets on Asbury Automotive Group, Inc. (NYSE:ABG) and Delphi are broad bets on the auto market. I also like his bet on PVH Corp (NYSE:PVH), which will be quite a bet on the apparel industry, bringing together a number of top brands.
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