• It's Coming...

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

A more focused marketing approach, plus market share gain I highlighted last week, plus a violent reaction to a recent short report gets me warmer on this name.

I just posted a quickie on Under Armour after going through some yellow flags I'm seeing in promotional activity. I searched through our arsenal of tools to find a company that is showing opposite trends. How ironic that the best match is Hanesbrands (i.e. super high performance apparel brand versus sleepy maker of tighty whities).

Check out the chart below, which shows brand promotional media spending by product type (each product sums up print, TV, internet and outdoor).

The most startling takeaway is how grossly different the strategy is today as opposed to when HBI was under Sarah Lee. It's like night and day. Shotgun versus sniper rifle. The old strategy fired as much buckshot as it could muster and hoped it hit something. The new strategy is to focus on a smaller number of targets, but nail them even if they're a quarter mile away.

When I combine this analysis with 1) my HBI posting from a few days ago showing how effectively HBI is gaining share in core categories, and 2) the stock's brutal reaction to a short report issued last week, I'm warming up to the stock.