Dj Ralph Lauren Corporation Class, Inst Holders, 3Q 2024 (Rl)

New On The Block

• Starbucks is looking to sell a stake in its Chinese operations. Same-store sales in China fell 14% last quarter, with the Seattle-based coffee retailer seeking partnerships to adapt to tough economic and competitive pressures.

Bankruptcy Block

• Snack producer Hearthside Food Solutions went bankrupt. The private equity-owned company looks to offload the $1.9 billion in debt accumulated under the ownership of Partners Group Holding AG and Charlesbank Capital Partners. The two firms bought Hearthside for more than $2.4 billion. Assets and liabilities hover between $1 billion and $10 billion. Last year, bankrupt private equity portfolio companies in the U.S. outpaced the number of bankruptcies in 2020. It remains to be seen whether 2024 will be worse.
• Northvolt filed for bankruptcy with debt of $5.8 billion. Recall how the Swedish battery maker, which supplies Volkswagen AG and Bayerische Motoren Werke AG (OTC:BMWYY), bargained with banks to raise debt last year. Now, it’s hoping to restructure under U.S. Chapter 11.

See Also: Benzinga Bulls And Bears: Tesla, Disney, Gold — And Hedge Funds Project Bitcoin To Hit $100K-$150K

Updates From The Block

• Google‘s $2-billion investment in Anthropic is in jeopardy, according to Bloomberg. Anthropic is a Jeff Bezos-backed rival to artificial intelligence (AI) innovator OpenAI. The U.S. Department of Justice (DOJ) recommended in a court filing Wednesday that Alphabet Inc‘s Google divest its Chrome browser to dismantle its monopoly on online search. It doesn’t end there. Google should be barred from doing any deals with companies that control where consumers search for information, regulators say. That includes AI products.
• Ricky Williams‘ Highsman merges with hemp brand Frozen Fields, forming Top Seed Inc. The partnership blends cannabis and hemp sectors, leveraging R&D to enhance products and control supply chains.
• MakeMyTrip acquires Happay from CRED. The deal is expected to enhance corporate travel and expense management solutions in India. Happay’s team will integrate with MakeMyTrip, supporting over 900 clients post-acquisition.
• Amcor plc and Berry Global Group, Inc. agreed to merge in an all-stock transaction, with the deal valuing Berry stock at $73.59 per share.
• Nippon Steel executives have traveled to Pennsylvania to garner support for their $15 billion acquisition bid for U.S. Steel . The Japanese steel giant is encountering political resistance in Washington. Takahiro Mori, vice-chair of Nippon Steel, arrived in Pittsburgh on Saturday to advocate for the acquisition. The deal faces opposition from both President Joe Biden and President-elect Donald Trump, who prefer U.S. Steel to remain under American ownership.

Notes From The Block

Joshua Robinson, co-founder of Darwin Financial Company, announced a $55-million financing deal with INYOAG LLC. The funds will help develop a solar-powered mine in Inyo County, California where there are proven reserves of silver, lead, zinc, tungsten, and copper. Here’s our conversation with Robinson:

BZ: What is the deal structure between Darwin Financial and base metals miner INYOAG?

Robinson: The deal structure is a $55M project financing package split into three components: $17.5 million and $12.5 million in six-year notes tied to sulfide and oxide production respectively, plus a $20-million conditional equity commitment that only triggers if the mine hits $10 million in monthly revenue. We get 17% of gross revenues from both production tracks, structured through secure lockbox arrangements. It’s not a straight equity investment, we specifically designed it this way to provide further upside exposure.

Are you looking for additional investors/joint venture partners?

Yes, we’ve deliberately structured this to create multiple layers of upside potential, which is pretty unique in the mining space. We’ve created a hybrid model that offers both near-term cash flow from production and significant expansion potential. We’re already seeing interest from established mining players, but we’re particularly excited about bringing new investors into the space who understand the strategic value of critical minerals.

What are the downsides to depending on foreign sources of critical minerals?

China’s recent actions really highlight the urgency here. They’ve already implemented export controls on germanium and gallium, and just added antimony to that list. This isn’t theoretical anymore, it’s actively happening. We need to build regional resilience in our supply chains, particularly for these minerals that are crucial for defense and technology. The Darwin Mine gives us a unique opportunity to establish a domestic source for multiple critical minerals in a single asset, which is rare to find.

Will the mine be powered by solar?

The 100MW facility wouldn’t just power the mine. It would generate significant excess clean energy that we can sell back to the grid. What’s particularly interesting is that we can develop utility-scale energy storage systems using minerals we’re already producing. It creates a virtuous cycle where our mining operations directly support clean energy deployment

What are your 2025 goals?

For 2025, our key goals are reaching 300 tons per day on sulfide production within six months and 200 tons per day on oxide within nine months of funding. That puts us at $ 10 million in monthly revenue, which then triggers the deeper mine development program.

For last week’s Deal Dispatch, click here.

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• Nvidia Rides AI Wave To Replace Intel On Dow Jones Industrial Average, Ending Its 25-Year Run

Image: Benzinga

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Investors with an interest in Textile - Apparel stocks have likely encountered both Ralph Lauren (RL) and Lululemon (LULU). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Ralph Lauren and Lululemon are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that RL likely has seen a stronger improvement to its earnings outlook than LULU has recently. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

RL currently has a forward P/E ratio of 17.68, while LULU has a forward P/E of 22.48. We also note that RL has a PEG ratio of 1.59. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LULU currently has a PEG ratio of 2.29.

Another notable valuation metric for RL is its P/B ratio of 5.27. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, LULU has a P/B of 9.60.

These are just a few of the metrics contributing to RL's Value grade of B and LULU's Value grade of D.

RL stands above LULU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that RL is the superior value option right now.

Zacks Investment Research

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores?

The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

For value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.

Growth Score

While good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum Score

Momentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM Score

What if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank

The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Ralph Lauren (RL)

Ralph Lauren Corp. is a major designer, marketer and distributor of premium lifestyle products in North America, Europe, Asia, and internationally. It offers products in the apparel, footwear, accessories, home furnishings, and other licensed product categories. The company possesses a strong portfolio of globally recognized brand names such as Polo Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Double RL, Lauren Ralph Lauren, Polo Golf Ralph Lauren, Ralph Lauren Golf, RLX Ralph Lauren, Polo Ralph Lauren Children, Chaps, Club Monaco and American Living.

RL is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 17.68; value investors should take notice.

Six analysts revised their earnings estimate higher in the last 60 days for fiscal 2025, while the Zacks Consensus Estimate has increased $0.42 to $11.71 per share. RL also boasts an average earnings surprise of 9.1%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, RL should be on investors' short list.

Zacks Investment Research