The markets are back to this year’s lows, although they have
bounced back during last week. Many stocks are still trading at or near their
52-week lows. When the market is down, I like to find support levels and create
price alerts at those support levels for all the companies that I am interested
in buying. One example is V.F. Corporation (VFC), which is an undervalued
Dividend Aristocrat.
V.F. Corporation (VFC) is one company that has my interest
because it hit a critical support level at $45. The chart below shows that it
bounced higher when the stock hit the $45 price point. I am very interested in
buying shares at this price. The stock is now above the $45 price point with a
share price of about $50 per share. However, VFC is still undervalued at
current levels, and the dividend yield is just about 4% and attractive mix. We
will discuss more details about the company and the amount of undervaluation.
Overview of VF Corp
The VF Corporation is an American global apparel and
footwear company founded in 1899 and now headquartered in Denver, Colorado. The
company was formerly known as Vanity Fair mills until 1969. The company’s 13
brands are organized into three categories: Outdoor, Active, and Work. The
primary brands are North Face, Timberland, Smartwool, Icebreaker, Altra, Vans,
Supreme, Kipling, Napapijri, Eastpak, JanSport, and Dickies. In addition, the
company controls 55% of the U.S. backpack market with the JanSport, Eastpak,
Timberland, and North Face brands.
VFC’s stock price was down 44.5% since its high in April
2021. The main driver of the stock price decrease is that the company is
struggling with product shortages, high shipping costs, a stronger dollar, and
COVID-19 virus-related disruptions in China. Still, VFC appears to be doing a
reasonable job of alleviating these challenges.
The current stock price of $50.18 (as of this writing) is
right at the lower end of the 52-week range, between $44.18 and $84.96 per
share. Thus, VFC looks like a stock that seems to be in the right place to buy
up shares where both the 52-week range and support line meet.
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