Gildan Activewear (GIL) Initiating Coverage
The apparel stock has “multiple ways to win”
I have initiated a position in GIL 0.00%↑ , and as a standard disclaimer am noting that nothing written below represents investment advice. Please consult your fiduciary prior to making any investment decisions.
The opportunity at Gildan, a “compounding machine”
The goal of my investment practice is to identify “compounding machines” - dominant businesses with high returns on invested capital that should be able to create substantial value as they re-invest profits.
The company we’ll be discussing today - Gildan Activewear ($GIL) - has displayed clear signs of being a compounding machine, delivering a ~11,807% return to shareholders since its IPO in 1998. Since 1998, Gildan Activewear has grown its revenues at a ~15% CAGR and EBIT at a ~13% CAGR.
Today you can buy Gildan, a business generating ROICs of ~17-22%, at only ~10x NTM EBITDA.