DLA - Delta Apparel: Far Below A Growing Book Value Broad Insider Buying Positive Read Through From Nike
Summary
- Delta Apparel has been very disappointing but is likely under 7x trough earnings which are temporarily suppressed by cotton prices and industry issues. Delta may be below 4x mid-cycle earnings.
- The company has guided to Activewear revenue flat y/y for the first half and up for the second half, which stands in stark contrast to the stock price.
- There has been significant insider buying as tax loss selling is holding back the stock.
- Apparel industry data has been decent/stable, including a large beat from customer Nike. The nature of the basic athletic apparel business is extraordinarily stable.
- DLA disclosed they purchased 13 Polaris DTG machines and have more being delivered in January. This is very likely to be the largest-ever quarter for DTG2Go.
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Delta Apparel: Far Below A Growing Book Value, Broad Insider Buying, Positive Read Through From Nike