Watching Maidenform Brands, Inc.

Posted on January 31, 2006 , filed under Stocks | Print This Post

I’ve added MFB, Maidenform Brands, Inc. to my watchlist. The company engages in the design, source, and marketing of a range of intimate apparel products in the United States and internationally. Maidenform was aquired by Ares Corporate Opportunities Fund, L.P. in May of 2004. The company had on its IPO on July 22nd, 2005 and opened at $20.50. Shares of MFB are listed on the NYSE. I can’t find any strong reason for the rapid decline in stock price for Maidenform. Shares of MFB are currently trading at $11.50. That is a drop of 43.9% compared to its July 22nd, 2005, opening price of $20.50.

The company announced that it narrowed its 2005 sales guidance to $385 to $390 million from $382 to $392 million. The company’s 3rd Quarter, 2005 results were slightly below analysts expectations. According to this press release, “Intimate apparel maker Maidenform Brands Inc. said Thursday its third-quarter profit fell 13 percent”. After looking at the full 3rd quarter, 2005, earnings annoucement you can see that net sales were actually up for the quarter and YTD comparisons.

Here are a pair of quotes taken from the earnings annoucement.

Net sales in the third quarter of 2005 were $100.1 million, up 11.2% from $90.0 million in the third quarter of 2004.

On a year-to-date basis, net sales increased 15.3% to $302.6 million in fiscal 2005, up from $262.5 million in fiscal 2004.

I believe there is not enough bad news to warrant a drop of 43.9% compared to the stocks IPO opening price on July 22nd, 2005. The market appears to have overreacted and investors are eager to sell at the moment. I like MFB at under $11 to low $11’s. I may purchase 1000 shares of MFB if the stock trades in that price range.

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