Q. Why have shares of Polo Ralph Lauren Corp. done well this year when many competitors haven't? -- P.J. via the Internet
A. The name on the company's famous brand of apparel and home decor still means something to shoppers.
Sold by Macy's, Dillard's and other retailers and through its own Ralph Lauren, Club Monaco and Rugby stores, its merchandise has a distinctive style that has withstood the test of time.
Whether that style is defined as traditional, timeless, preppy or sporty, it is being sold effectively at a number of price levels. Polo, Ralph Lauren Purple Label, Black Label, Lauren, RLX and Chaps are among its brand names. Meanwhile, it is reacquiring licenses for some of its brands to exert greater control.
Net income in its fiscal first quarter, ended June 28, rose 8 percent thanks to strong international sales, prompting the company to raise full-year sales estimates. It is in excellent financial shape.
Shares of Polo Ralph Lauren (RL) are up 18 percent this year following a 20 percent decline last year. Ralph Lauren, who founded the firm in 1967 and has been chairman and chief executive since its initial public offering in 1997, effectively controls 88 percent of all voting shares.
The company's 80 specialty stores around the world allow it to control prices effectively. Having ties to department stores has definite pluses but can be a negative when such stores are suffering through a difficult economy.
Its American Living line of apparel, accessories and home goods, launched at J.C. Penney Co. in February, was the biggest rollout in Penney history and is contributing to the Polo Ralph Lauren bottom line. Yet while Penney management estimates that the high-end line will generate more than $300 million in sales its first year, there has been significant price-cutting.
Consensus rating on Polo Ralph Lauren stock is between "buy" and "hold," according to Thomson Financial. That consists of one "strong buy," four "buys" and eight "holds."
The firm plans to launch a mobile commerce site within a year. Special codes will be placed in print ads, mailings and store windows. Shoppers can download special software to camera phones to scan the codes and be directed to a phone-friendly Web site.
Earnings are expected to increase 3 percent for its fiscal year ending in March and then 12 percent the following year. The expected five-year annualized earnings growth of 14 percent compares with 13 percent projected for the apparel-makers industry.
Q. Is Tweedy, Browne Global Value Fund worth investing in? -- C.G., via the Internet
A. The flexible all-capitalization fund doesn't invest much in technology, energy or emerging markets, mostly because such stocks cost too much for its value-oriented philosophy.
Financials, industrials, service industries and other traditional value types of industries are more its inclination. Despite the recent financial debacle, the fund represents a low-risk way to invest internationally for the long haul.
The $5.7 billion Tweedy, Browne Global Value Fund (TBGVX) is down 19 percent over the past 12 months, which ranks in the top 10 percent of foreign small- to mid-cap value funds. Its three-year annualized return of 3 percent puts it just above the midpoint of its peers.
"We recommend it, even though it has been hurt recently by the credit crisis and market meltdown, and we would have expected its value emphasis to hold up better in difficult times," said Bridget Hughes, analyst with Morningstar Inc. in Chicago, pointing out that its five-year annualized return of 9 percent beat inflation by a wide margin. "That's a reminder to investors that they should have a long-term horizon and some tolerance for these bumps."
Since the fund's inception in 1993, lead managers have been experienced investors Christopher Browne, William Browne and John Spears. Based on valuations, their portfolio can be small- or large-cap, with some micro-caps too. To ease volatility, the team hedges most foreign currency exposure back into the U.S. dollar.
"That currency hedging hurt the fund the past several years because other currencies have appreciated versus the dollar," Hughes said. "But it also helps stabilize the fund a bit."
One-third of the Tweedy, Browne Global Value Fund portfolio is in consumer goods, with financial services and media its other major concentrations. More than two-thirds of holdings are in the United Kingdom and Western Europe. Japan, the rest of Asia and North America round out the portfolio.
Top stock holdings are Switzerland's Nestle; Finland's Kone; France's CNP Assurances; the Netherlands' Heineken Holding, Akzo Nobel and Telegraaf Media Groep; Belgium's KBC Groep; Germany's Axel Springer Verlag; and the United Kingdom's Diageo.
This "no-load" (no sales charge) fund has a 1.37 percent expense ratio and requires a $2,500 minimum initial investment.
Q. I'm a relatively new investor. What are the Securities and Exchange documents that investors typically read about the stocks they own? -- S.R., via the Internet
A. According to the SEC, the documents most requested by investors are the 10-K and 10-Q, which are a company's audited annual financial statements and unaudited quarterly reports.
Next in popularity is the Schedule 14-A proxy statement with information about the annual meeting and executive compensation, followed by Forms 3, 4 and 5 on beneficial ownership that reveal any corporate insider trading in company stock.
"A lot of investors are also interested in ownership in excess of 5 percent of any stock class by anyone who isn't an officer or director, as well as what stocks the mutual funds own," said Jack Hardy, branch chief with the SEC's Office of Investor Education and Advocacy in Washington, D.C. "That information is in Schedule 13-D and 13-G."