A Genuinely Nutty Idea

 | Jul 24, 2014 | 10:48 AM EDT
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You want to hear the nuttiest idea yet? You know what group is doing incredibly well with fantastic growth and terrific gross margins?

It's specialty apparel -- namely, Skechers (SKX), Under Armour (UA), Carter's (CRI) and Hanesbrands (HBI).

Tonight on Mad Money, I'll have Skechers on, and this company has been just doing so well, with all new lines of footwear and terrific promotion. The stock is still way too cheap.

As for Under Armour, a heavily shorted technology stock that happens to be in the apparel industry, management has highlighted that it is doing well in footwear and in international sales. The truth is, though, there isn't anything that this company isn't doing well. The direct-to-consumer service is amazing. The gross margin is terrific. The stores are amazing. This is a momentum stock that has much further to go.

Nike's (NKE) good, but not as good as Under Armour.

I have to do more work on Carter's, but this is just a remarkable back-from-the-dead comeback story.

Then there is Hanesbrands, which is the consolidator of a fragmented undergarment industry. The company gobbled up Maidenform, and has already turned it into an incredible cash machine. I profiled Hanesbrands not that long ago on Mad Money, and I think the growth is totally sustainable for at least another year.

Contrast these with VF Corp. (VFC) and PVH (PVH). The first one is doing quite well, but it has become caught up in the whole department-store slowdown. The second paid way too much for Warnaco and has been struggling ever since.

I believe in both VF and PVH, because the management teams are quite good. But failing to point out the disparity between the special guys on one hand, and the general companies on the other, would mean being oblivious.



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