Question:
My husband and I just got into The Andersons Inc. about mid-year. What is your outlook for the company for the next few years? I’d like to keep our turnover low for the next few years.
Answer:
The Andersons Inc. (NASDAQ: ANDE) operates in the agricultural and transportation markets with five business segments: Grain & Ethanol, Rail, Plant Nutrient, Turf & Specialty and Retail. The company is similar to Archer Daniels Midland (NYSE: ADM), but considerably smaller, with a market cap of $817 million. The stores, predominantly in Ohio, are unique in nature, where you can buy both a tractor to till your farm land and a loaf of bread for dinner.
While the company meets our financial criteria and looks cheap on a P/E basis, it is difficult to determine the consistency of earnings as the company is involved in the ethanol business. Standard & Poor’s rates the company’s beta as 1.49, which is considerably more volatile than the market. If you own shares, we recommend holding; however, we do not currently deem this as a buy.
Question:
I just love Cabela’s. I love the store, I love the stock. It appears to me that the store has a very loyal business and their catalog has a ton of products. I want to buy more. I bought my initial shares around $25. It’s definitely more now, but down from its high. This is still a buy right?
Answer:
Cabela’s Inc. (NYSE: CAB) is not a buy, in our opinion, with a P/E of 17.45. While the company is currently trading around $44, it went through a rough patch in 2008 when the company almost went out of business. The stock was trading around $5 then. Cabela’s is a specialty retailer, and a direct marketer of hunting, fishing, camping and related outdoor merchandise. Despite boasting an extensive catalog, in 2011, 62% of the company’s sales come from Cabela’s 34 retail stores. More than 50% of the sales are hunting related. If you own Cabela’s, we recommend holding it.
Question:
I need to decide between Men’s Warehouse and Jos A Bank. My gut says Jos A Bank is a better brand, but Men’s Wearhouse pays a dividend. What is your outlook for the two, and which would you buy?
Answer:
While consumers are hard-pressed to buy anything at Jos A Bank Clothiers Inc. (NASDAQ: JOSB) at full price, their advertising model has little to do with the company and the stock. Both Jos A Bank and The Men’s Wearhouse, Inc. (NYSE: MW) are retailers of men’s tailored and casual clothing and accessories. they are also a retailer of tuxedo rental products. Additionally, both look to be good companies that meet our financial criteria. However, we believe that Jos A Bank has a better business model and better source material. While they rent space in shopping malls, which can be expensive, the company has larger sales turnover and higher margins. The company has almost no debt and nearly $10.50 per share in cash.