Video Lecture: Valuing Growth: Liz Claiborne

I posted this before November 7, 2011, but now I embedded the documents for easier access. Also, there is a link to the video. I will keep putting links to videos rather than have a value vault so everyone can have access and I don’t have to keep sending keys.

Liz Claiborne

So what is the company worth? Show your work. Don’t cheat yourself–do the work BEFORE clicking on my notes or the video lecture!

Jan 01, 2000 10-K for Liz Claiborne. Liz-Claiborne-10-K-Jan-1-2000

Video Lecture: just click and download the Greenwald video lecture: https://www.yousendit.com/download/T2dkOGNVdGpPSHdVV01UQw

Solution and Lecture notes to valuation of Liz Claiborne: Greenwald-Class-Notes-5-Liz-Claiborne-Valuing-Growth-2

Compare this lecture to a standard overview of valuation techniques: Equity-Research-and-Valuation-B-Kemp-Dolliver

2 responses to “Video Lecture: Valuing Growth: Liz Claiborne

  1. “I will keep putting links to videos rather than have a value vault so everyone can have access and I don’t have to keep sending keys.”

    Good idea! Thank you John.

  2. Interestingly enough, I was really lazy and noted that the company was growing nicely, so a PER of 15 was probably about right, giving it a value of $46.80. Turns out I was a little high, but not bad for a rapid valuation.

    Alas, then I completely lost the plot. I remembered an article by Gannon where I woefully underestimated the fair value of a secret company which turned out to be Walmart. So I decided to then apply a multiple of 20, giving it a value of $62.40.

    Ouch. I was wrong.

    I saw an article at
    http://www.wikinvest.com/stock/Liz_Claiborne_%28LIZ%29
    which shows that LIZ is now at $13.00. Things change, don’t they?

    The article accounts for its demise in the following way: “Like many other retailers, LIZ has struggled through the sluggish economy as consumers cut back on spending. Even two of LIZ’s top brands, Juicy Couture and Lucky Brand, which fared well at the beginning of the economic uncertainty, have had declining revenues, indicating that the sluggish economy has affected all of the company’s operations. The company’s net sales fell by 24% in 2009.”

    Yikes. What is an investor to make of that?

    The thing is, there are some retailers who are doing very well at the moment: Supergroup, a UK apparel company, is doing gangbusters, and is in a rapid growth phase. It sells expensive casual clothes. Taken at face value, this example makes it difficult to square with explanations of economic uncertainty and a sluggish economy.

    Scanning through the headlines, I see “sale of namesale brand”, “losses widen”, “hits snag in new strategy” and “reduce debt”. Oh dear. Investing, it’s not easy, is it?

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