In his second Executive Decision segment of "Mad Money" Monday, Jim Cramer sat down with Manny Chirico, chairman and CEO of apparel maker PVH Corp. (PVH) , an apparel giant that just posted a strong quarter with top- and bottom-line beats.
Chirico said Hong Kong and greater China remains a challenging market for PVH. In Europe, however, sales are strong, with Tommy Hilfiger performing exceptionally well and the Calvin Klein brand also growing.
In the U.S., apparel remains a mixed bag, Chirico said. There hasn't been much cold weather to spur people into buying winter apparel yet and the Heritage brand remains challenged, particularly at department store retailers such as Macy's (M) , Kohl's (KSS) and J.C. Penney (JCP) . However, Heritage only represents 10% to 12% of PVH sales, Chirico noted, and he thinks the damage has been contained.
Turning to the topic of trade, Chirico said he understands the uncertainty in the share price and why the stock sells for just 10x earnings. He said it's almost Dec. 1 and PVH has no idea what tariffs it will be paying on Jan. 1. But that didn't stop Chirico from personally buying $10 million of stock earlier this year. He said he's taking a long-term view and is confident the company will be in great shape.
We looked at the charts and indicators of PVH on Nov. 18 and wrote at that time: "Traders could try to go long PVH nearer to $95 and risking a close below $90 while targeting the $120 area." Let's check in with the charts again to see it things are still on track.
In this updated daily bar chart of PVH, below, we can see PVH has recently closed above the bottoming 200-day moving average line. The 50-day moving average line is still positive, as is the On-Balance-Volume (OBV) line. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but narrowed recently. Renewed price strength should turn the MACD oscillator upward to a fresh buy signal.
In this updated weekly bar chart of PVH, below, we can see that prices are moving above the bottoming 40-week moving average line. The weekly OBV line has remained steady and the MACD oscillator continues to improve, moving toward the zero line.
In this Point and Figure chart of PVH, below, we can see that a trade at $101.37 will be a new high for the move up and refresh the uptrend. The $118 area is still our upside price target for now.
Bottom line strategy: We remain positive on the charts and direction of PVH. Hold longs and raise stop protection to a close below $93 now. Our nearest price objective is still $118.
