NEW YORK (TheStreet) -- Jos. A. Bank Clothiers (JOSB) moved upward 4.7% in midday trading on Monday to $56.97 a share in the face of an offer from Men's Wearhouse (MW) to buy all outstanding shares of the company.
Men's Wearhouse announced that it has initiated a cash tender offer to purchase all outstanding shares of Jos. A. Bank Clothiers at $57.50 a share. The tender offer will expire at 5 p.m. Eastern on Friday, March 28 unless the offer is extended beyond that point. Men's Wearhouse will file offering documents, which contain the complete details, terms and conditions of the offer, with the Securities and Exchange Commission on Monday.
Furthermore, Men's Wearhouse announced Monday that it would notify Jos. A Bank that it plans to nominate independent candidates for two director positions on Jos. A Bank's board of directors at the company's annual meeting in 2014.
Men's Wearhouse climbed to as much as $52.53 a share shortly after 11:00 a.m. on Monday.
TheStreet Ratings team rates Jos. A. Bank as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate JOS A BANK CLOTHIERS INC (JOSB) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- JOSB has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, JOSB has a quick ratio of 2.39, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 365.83% to $16.85 million when compared to the same quarter last year. In addition, JOS A BANK CLOTHIERS INC has also vastly surpassed the industry average cash flow growth rate of 4.43%.
- The gross profit margin for JOS A BANK CLOTHIERS INC is rather high; currently it is at 60.44%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.50% trails the industry average.
- Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 27.14% which was in line with the performance of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: JOSB Ratings Report