I've already spoken about Game Stop Corp Com (GME) in my last post that was centered around the purchase of their company so I want to use this post to exclusively talk about L Brands (LB) and why the buy signal has flashed in my head. The reasoning for the purchase of L Brands (LB) centered around the psychology of the current dip in price. Where only a short few months ago the brand was trading for over $100/share, a change in management and direction has left a lot of investors running for the hills. I would argue however that a shift in management in this case is hardly reason to worry.
L Brands (LB) holds so much attractiveness that I believe it's hard for anyone to really put a price tag on it. I imagine going up to my wife and telling her that she will no longer be able to buy anything from Victoria's Secret. I feel like I would sooner have something chucked at my head than be successful in telling her to avoid the store. Women (and men for good reason!) have a great view of the store because it has such a great history of providing wear that makes women feel sexy. For women (largely due to society being a douche and training them to be this way), feeling sexy is of great importance. Since Victoria's Secret does such a great job at it, seldom would their sales drop unless they were to completely turn away from the styles that they have been so successful with in the many years they have been in business.
Granted, this is only half the business - there is the Bath and Body Works side to the business as well. I don't know about you but I work in an office building. I would be lying if I said there were ever a single day that I've walked about the office and not smelled at least a handful of their products floating around the office. That side of the business is alive and well.
This was an easy buy. Their brand has an incredible name for recognition and a simple change in management and styles of advertising will hardly impact what they take in on the bottom line. I simply have to wait for the next earnings release to confirm this. Q2 has historically been very good for L Brands (LB) and then a small drop in Q3 before a HUGE jump in Q4 thanks to a certain holiday that would be a lot less amazing without Victoria's Secret. The final summary is below:
Purchase of L Brands (LB) - 8 shares @ 66.943 points - total price: $545.534