Friday, January 20, 2017

Stock of the Month: Hanesbrands, Inc.

This is the first of hopefully many monthly posts about the stock I chose to buy that month.  I want to make it clear from the onset that I am not a professional investment advisor, that what is right for me may not be right for you and that this account, for me, is in between an investment and a toy.

I firmly believe that for most people the best long-term way to invest is in a diversified portfolio of low cost index mutual funds or ETFs.  That is where the majority of my investment money goes. 

However, being a bit of an investment nerd, I want to try to beat the system and pick my own stocks. This portfolio is a very small portion of my investable assets.  To put it another way, instead of buying shoes I don't need, I'm buying stocks I don't need; if they all tank tomorrow, life will go on as before.

What Stock Did  I Buy This Month?

This month I bought two shares of Hanesbrands, Inc.

What Does Hanesbrands, Inc. Do?

Haneswear, Inc. makes underwear and active wear. Their brands include Hanes, Bali, Playtex, Champion and L'Eggs.  

Why Did I Pick Hanesbrands, Inc.?

This month I decided to start my search for a stock at Morningstar.  My library subscribes to the full version of Morningstar and I can access it from my home computer.  I searched for five star stocks and then reviewed the list for companies with which I was familiar.  There were two:  Bed Bath and Beyond and Hanesbrands.  My Loyal3 portfolio already has Target and Kohls so I didn't want another retailer.  I decided to investigate Hanesbands further.

I then checked A Frugal Family's Journey's list of stock analysis post  in 2016 to see if anyone had written about Hanesbrands recently, and I found that Dividend Diatribes had and that JT was at least interested in the stock.  

I went back to Morningstar and read their analyst report written in October, 2016 which valued the stock at $39.00.  Since I bought at $21.93, Morningstar believes I got a bargain.  Gurufocus  has a calculator which only gave a value of $17.63 but I didn't find that until after I bought the stock. Zachary Sturdy wrote about Hanesbrands for Seeking Alpha and he valued it at $28.49 per share.

I decided that when I thought underwear, I thought Hanes and I'm sure a lot of other people do too.  At the price I paid, if dividends do not go up this year, I'll earn 2% .  The expectation is that Hanesbrands will raise the dividend.

Where Did I Get the Money?

The money I invested in the Hanesbrand, Inc. stock is money paid as dividends in my Motif portfolio.  

From Whom Did I Buy the Stock?

I purchased my Hanesbrand stock via Robinhood.  I paid no commission and will pay no commission when I sell.  

Did you buy any stock this month?
*Part of Financially Savvy Saturdays on brokeGIRLrich, and Racing Towards Retirement*

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