"Jos. A. Bank Clothiers, Inc. (NASDAQ: JOSB) matches the value criteria used by our Benjamin Graham stock screening model by 100%," suggests John Reese.
In his Validea newsletter, he assesses stocks based on the strategies of numerous "legendary" stock market investors. Here's his review of the apparel retailing chain.
"Jos. A. Bank is a designer, retailer and direct marketer of men's tailored and casual clothing and accessories through stores, catalog and Internet.
"The company sells substantially all of its products exclusively under the Jos. A. Bank label through its 422 retail stores, as well as through the company's nationwide catalog and Internet operations.
"Our Ben Graham stock selection model requires that the current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. JOSB's current ratio of 2.81 passes the test.
"For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that meet this criterion display one of the attributes of a financially secure organization. The long-term debt for JOSB is $53.0 million, while the net current assets are $200.9 million. JOSB passes this test.
"Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. JOSB's EPS growth over that period of 1,093.2% passes the EPS growth test.
"The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. JOSB's P/E of 9.00 (using the 3 year PE) passes this test.
"The Price/Book ratio must also be reasonable. That is, the Price/Book multiplied by P/E cannot be greater than 22. JOSB's Price/Book ratio is 1.37, while the P/E is 9.00. JOSB passes the Price/Book test."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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12-15-2008 @ 11:24PM
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