Best Stocks for 2008: Bargain shopping at The Men's Wearhouse (MW)

Happy New Year's Masters, enjoy the day off and our advice is to drink Gatorade to battle that hangover.  Our friend James Cullen at CollegeAnalysts.com covered MW a few weeks back, here's his article - Men: Next to Women, the Most Recession-Proof Shoppers. 

Turns out Steve Halpern likes the stock as well, here's his article, enjoy --- For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My conservative choice for 2008 is The Men's Wearhouse Inc. (NYSE: MW), one of the largest specialty retailers of men's suits," says value investor Charles Mizrahi, editor of Hidden Values Alert.

"Men's Wearhouse stores offer a broad selection of designer, brand-name and private label merchandise at prices 20% to 30% below the regular prices found at traditional department and specialty stores.

"The firm's US operations include 636 retail apparel stores. The brand targets middle- and upper-middle-income men by offering quality merchandise at everyday low prices. In addition to value, the company believes it provides a superior level of customer service.

"The shares outstanding have decreased by 10% over the past five years. In addition, long-term debt/equity is only 9% and it has $135 million in cash and short-term investments on its balance sheet (as of August 7, 2007).

"Net profit margin has doubled over the past five years to 7.2%. And, for the past three years, return on equity has been over 18% -- up sharply from 10% in 2003. Meanwhile, in the past five years, store count has doubled to 1,269 as of August 7, 2007.

"Overall, MW is a well-run business, and a price of $41.50 or less per share represents very good value. If MW can grow earnings at only 13% per annum (which is 70% lower than its five-year average) and maintain a P/E of 12, the stock will handsomely reward investors through the next five years."

3 Month Chart for MW

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