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Company name Carter’s, Inc.
Stock ticker CRI
Live stock price [stckqut]CRI[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Fair
EPS growth Good
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $142.68
Target stock price (averages with growth) $134.73
Target stock price (averages with no growth) $61.05
Target stock price (manual assumptions) $123.88

The following company description is from Google Finance: http://www.google.com/finance?q=cri

Carter’s, Inc. (Carter’s) is a marketer of apparel for babies and young children in the United States. The Company owns two brand names in the children’s apparel industry, Carter’s and OshKosh. The Company operates through five business segments: Carter’s wholesale, Carter’s retail, OshKosh retail, OshKosh wholesale and international. Under its Carter’s brand, Carter’s designs, sources and markets an array of products, primarily for sizes newborn to seven. Carter’s brand is sold in department stores, national chains, specialty stores, off-price sales channels, through its Carter’s retail stores, and online atwww.carters.com. Under its OshKosh brand, the Company designs, sources, and markets an array of young children’s apparel, primarily for children in sizes newborn to 12. Its OshKosh brand is sold in its OshKosh retail stores, department stores, national chains, specialty stores, through off-price sales channels, and online at www.oshkoshbgosh.com andwww.oshkosh.com.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in Carter’s, Inc. as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns. I am removing Carter’s from my Watch List.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Carter’s, Inc. calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(access_s2member_level1)]

In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

  • Stock price at the time of the calculation: $92.3
  • Growth: 0.17
  • Current EPS (TTM): $3.64
  • P/E: 25
  • Future EPS Calc: $7.98
  • Future Stock Price Calc: $199.51
  • Target stock price: $123.88

[/s2If]
I hope that this makes you a Confident Investor.

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Company name Carter’s, Inc.
Stock ticker CRI
Live stock price [stckqut]CRI[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Fair
Sales growth Fair
EPS growth Good
P/E growth Good
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $91.81
Target stock price (averages with growth) $113.81
Target stock price (averages with no growth) $80.44
Target stock price (manual assumptions) $92.39

The following company description is from Google Finance: http://www.google.com/finance?q=cri

Carter’s, Inc. (Carter’s) is a branded marketer of apparel for babies and young children in the United States. The Company owns two brand names in the children’s apparel industry, Carter’s and OshKosh. Its Carter’s brand provides apparel for children sizes ranging from newborn to seven. OshKosh brand provides its line of apparel for children sizes newborn to 12. Its Carter’s, OshKosh, and related brands are sold to national department stores, chain and specialty stores and discount retailers. As of December 31, 2011, the Company operated 359 Carter’s and 170 OshKosh outlet and brand retail stores in the United States and 65 retail stores in Canada. On June 30, 2011, the Company acquired Bonnie Togs, a Canadian children’s apparel retailer and a former international licensee. In March 2012, the Company opened its Canadian flagship store at Vaughan Mills, which is a 7,300 square foot store, located at one Bass Pro Mills Drive.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in Carter’s, Inc.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

How was this analysis calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(s2member_level1)]
In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

Stock price at the time of the calculation: $73.57

Growth: 0.15

Current EPS (TTM): $2.74

P/E: 27

Future EPS Calc: $5.51

Future Stock Price Calc: $148.8

Target stock price: $92.39

I hope that this makes you a better investor. [/s2If]

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wall street photoThere are probably more than 5 things about that you need to understand about investing to be a confident investor. However, none of them are more critical than this list of five. If you get one of these wrong, you are going to struggle being a confident investor.

Here are 5 critical things to know as a confident investor

1. Compound interest is what will make a confident investor rich.

In this hurry up world that we live in, this is frustrating. It also gives credence to the 5th item on this list. It takes time to become rich. Warren Buffett is a great investor, but what makes him rich is that he’s been a great investor for two thirds of a century. Of his current $60 billion net worth, $59.7 billion was added after his 50th birthday, and $57 billion came after his 60th. If Buffett started saving in his 30s and retired in his 60s, you would have never heard of him. His secret is time and consistency.

Most people don’t start saving in meaningful amounts until a decade or two before retirement, which severely limits the power of compounding. That’s unfortunate, and there’s no way to fix it retroactively. It’s a good reminder of how important it is to teach young people to start saving as soon as possible.

This doesn’t mean that all is loss if you are in your 40s or 50s. It does mean that you need to be realistic and not listen to the latest get rich quick scam. As I say in my book, The Confident Investor, I do not believe it is possible to do anything legal and get rich quick.

2. Revenue and profit is why confident investors invest in companies.

Companies that do not generate revenue (and therefore profit), will eventually not be successful. Future revenue or potential revenue or revenue projections are fine but over time revenue needs to come in to the company.

Along the same lines, a company eventually has to be profitable. Profitless growth is fine in some situations, but eventually, the company needs to pay its own bills. Getting money from investors to pay the company’s bills is fine for a young company, but eventually the company has to pay its own way.

The longer it takes to get to revenue or get to profit, the more likely the company has internal problems or a lack of focus. A confident investor will stay away from companies as they are risky and there is no way to be confident that the company will be successful. Past success is the single best indicator of future success – it is safer for a confident investor to invest in growing and profitable companies.

3. Simple is usually better than smart.

A confident investor that bought a low-cost S&P 500 index fund in 2003 earned a 97% return by the end of 2012. That’s great! And they didn’t need to know a thing about portfolio management, technical analysis, or suffer through a single segment of “The Lighting Round.”

Meanwhile, the average equity market hedge fund lost 4.7% of its value over the same period, according to data from Dow Jones Credit Suisse Hedge Fund Indices. The average long-short equity hedge fund produced a 96% total return which is still short of an index fund.

I cover this concept in my book, The Confident Investor, and I have also written articles concerning active funds v. index funds.

4. The odds of the stock market experiencing high volatility are 100%.

Most investors understand that stocks produce superior long-term returns, but at the cost of higher volatility. Yet every time there’s even a hint of volatility, the same cry is heard from the investing public: “What is going on?!”

Nine times out of ten, the correct answer is, “Nothing is going on.” This is what stocks do. They go up and they go down. Sometimes there is nothing going on with the company that is driving the movement. Don’t worry about small variations or even trends that last a week or two.

Since 1900 the S&P 500 has returned about 6% per year, but the average difference between any year’s highest close and lowest close is 23%. Remember this the next time someone tries to explain why the market is up or down by a few percentage points. They are basically describing why it always rains after you wash your car.

5. The industry is dominated by cranks, charlatans, and salesman.

The vast majority of financial products are sold by people whose only interest in your wealth is the amount of fees they can sucker you out of. You need no experience, credentials, or even common sense to be a financial pundit. Sadly, the louder and more bombastic a pundit is, the more attention he’ll receive, even though it makes him more likely to be wrong.

I honestly hope that you don’t think I am one of those people.  🙂

Photo by budgetplaces.com

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Did you invest at the bottom of the financial crisis? This happened in March 2009. If you did invest at the bottom, you would have enjoyed a massive multi-year bull market.

The above video does a great job of pointing out the benefits of simply investing in an index fund in the equity market. It also points out the fallacy of just leaving your money in a savings account.

Several times, I have pointed out that the system that I describe in my book, The Confident Investor, actually would allow you to avoid the massive downfall in  late 2008 and early 2009. When I published the trade-by-trade analysis of The Boston Beer Company [stckqut]SAM[/stckqut], Decker Corporation [stckqut]DECK[/stckqut], and eBay [stckqut]EBAY[/stckqut], I intentionally chose a time frame that included this massive drop. As you can see by analyzing my trades during that time, I avoided the worst of the drop as my system sensed the downturn and kept my money safe.

Click through to those articles of SAM, DECK, and EBAY and you will see how efficient my system is at preserving capital and allowing you to increase your wealth over a simply buy and hold strategy. I also wrote an article about how my system works really well at finding the best companies and beating the market by 95%, if you invest at the bottom or just buy at a short-term bottom.

My system helps you to invest at the bottom of the market and avoid losing money as the market drops. For stocks that go up and down in price, it is incredibly efficient. You can almost guarantee that there will be another opportunity to invest at the bottom of a stock. Are you prepared for getting out of your stock investments before it hits bottom? Are you setup to invest at the bottom?

You can purchase my book wherever books are sold such as Amazon, Barnes and Noble, and Books A Million. It is available in e-book formats for Nook, Kindle, and iPad.

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Company name Allscripts Healthcare Solutions Inc
Stock ticker MDRX
Live stock price [stckqut]MDRX[/stckqut]
Confident Investor Rating Poor

The following company description is from Google Finance: http://www.google.com/finance?q=mdrx

Allscripts Healthcare Solutions, Inc. (Allscripts) is a provider of clinical, financial, connectivity and information solutions and related professional services to hospitals, physicians and post-acute organizations. The Company provides a variety of integrated clinical software applications for hospitals, physician practices and post-acute organizations. For hospitals and health systems these applications include its Sunrise Enterprise suite of clinical solutions, consisting of a range of acute care Electronic Health Record (EHR), integrated with financial/administrative solutions, including performance management and revenue cycle/access management. The Company’s acute care solutions include Emergency Department Information System (EDIS), care management and discharge management. On February 24, 2011, Misys plc (Misys) disposed of its remaining interest in Allscripts. Effective March 5, 2013, Allscripts Healthcare Solutions Inc acquired Jardogs LLC. and dbMotion Ltd.
Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in Allscripts Healthcare Solutions Inc. It is not possible to confidently invest in a company that is not currently profitable.
If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.