Yesterday I bought Liz Claiborne (LIZ). You’ve probably heard of the brand Liz Claiborne, but you are probably unaware that Liz Claiborne the company is an umbrella of many brands including Kenneth Cole, Lucky Brand Jeans, and my favorite brand of all Juicy Couture. (That’s a favorite from an investing standpoint. I’d never actually wear Juicy Couture myself even though the brand now includes a men’s line.)
LIZ is not normally the type of stock I like to invest in. The best returns are from stocks that don’t have any profits because you'll often find profitless companies in which other investors won’t see the value. When company has steady earnings year after year, everyone can look at the P/E ratio and know how to value the stock. LIZ is not a stock that’s going to go up 400% on you, so it’s pretty boring.
Nevertheless, LIZ seems undervalued compared to the P/E ratios of other clothing companies (based on a quicky comparison search at MSN):
Liz Claiborne (LIZ) 12.10
Benetton Group (BNG) 14.30
Jones Apparel Group (JNY) 15.30
bebe stores (BEBE) 18.70
Polo Ralph Lauren (RL) 23.90
Trading near its 52-week low, LIZ seemed really cheap and I didn’t have anything else to invest in. The stock price was up 1.34% today, so maybe I’m on to something here. At the least it seems like a safe place to park some extra money until I can come up with better investments.