Outdoor financials: Analyst adds Hanesbrands to ‘Top Picks’ list, plus Winmark

An analyst added Hanesbrands to his ‘Top Picks’ list, noting its earnings could grow 20 percent annually over the next three years,and Winmark, parent of Play It Again Sports, said it would redeem all of its outstanding renewable unsecured subordinated notes by late July.
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Analyst adds Hanesbrands to ‘Top Picks’ list

Earnings for Hanesbrands (NYSE: HBI), parent of Duofold, could grow by as much as 20 percent annually over the next three years, an FBR Capital Markets analyst said as he placed the stock in his firm's "Top Picks" list.

Analyst Eric Tracy said in a note to investors that shares have fallen 14 percent over the past two weeks, but the stock will likely rise after the company reports earnings on July 21.

Investors eventually will get more comfortable with the fact that cotton prices and other costs are rising and Hanesbrands plans to implement a price increase to offset this, he added.

The company's long-term outlook also plays a role in moving the stock to the "Top Picks" list. "Should Hanesbrands successfully execute its strategy, 20 percent annual earnings growth is achievable over the next three years, making Hanesbrands one of the most compelling stories in our space," Tracy wrote.

Winmark to redeem notes

Winmark Corp. (Nasdaq: WINA), parent of Play It Again Sports, said it would redeem all of its outstanding renewable unsecured subordinated notes by late July, using a combination of its existing cash as well as bank borrowings.

The company said the redemption price would equal 100 percent of the principal amount, plus accrued and unpaid interest up to the redemption date. All interest due on the notes will cease to accrue on and after the redemption date, it added.

“This series of transactions will lower our overall cost of borrowing, allow us to use our existing cash to pay down debt and preserve our flexibility for the future,” said John Morgan, chairman and CEO, in a statement.

As of June 26, Winmark said it had approximately $18.6 million of renewable unsecured subordinated notes outstanding.

The company noted that the redemption is contingent upon it obtaining financing to complete the transaction. It said it has received a commitment from one of its existing lenders on a new bank agreement that it expects to have in place prior to the redemption date.



--Compiled by Wendy Geister

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