Critical Survey: K Swiss (KSWS) and Iconix Brand Group (ICON)
K Swiss (NASDAQ: KSWS) and Iconix Brand Group (NASDAQ:ICON) are both small-cap cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.
This table compares K Swiss and Iconix Brand Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Iconix Brand Group||-82.22%||10.38%||3.02%|
Institutional and Insider Ownership
85.1% of Iconix Brand Group shares are owned by institutional investors. 2.0% of Iconix Brand Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility and Risk
K Swiss has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Iconix Brand Group has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.
Earnings and Valuation
This table compares K Swiss and Iconix Brand Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Iconix Brand Group||$368.46 million||0.23||-$252.13 million||($5.20)||-0.28|
K Swiss has higher earnings, but lower revenue than Iconix Brand Group. K Swiss is trading at a lower price-to-earnings ratio than Iconix Brand Group, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for K Swiss and Iconix Brand Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Iconix Brand Group||0||5||0||0||2.00|
Iconix Brand Group has a consensus target price of $5.00, suggesting a potential upside of 237.84%. Given Iconix Brand Group’s higher possible upside, analysts clearly believe Iconix Brand Group is more favorable than K Swiss.
Iconix Brand Group beats K Swiss on 7 of the 9 factors compared between the two stocks.
About K Swiss
K-Swiss Inc. (K-Swiss) is engaged in designing, developing and marketing an array of footwear, apparel and accessories for athletic, sports and fitness activities and casual wear under the K-Swiss brand. The Company also designs, develops and markets footwear for adventurers for all terrains under the Palladium brand. The Company sells products primarily to footwear stores, pro shops, sporting goods stores and department stores. Internationally, as of December 31, 2011, K-Swiss had the right to market its products in 124 countries through eight international subsidiaries and 29 distributors. During the year ended December 31, 2011, approximately 60%, 21%, 17% and 2% of the Company’s footwear products were manufactured in China, Thailand, Vietnam and Indonesia, respectively. In May 2013, E.Land World Ltd. completed the acquisition of K Swiss Inc in a merger transaction.
About Iconix Brand Group
Iconix Brand Group, Inc. is a brand management company. As of December 31, 2016, the Company owned a portfolio of over 30 global consumer brands across women’s, men’s, and home categories. The Company operates through segments: men’s, women’s, home and international. The Company’s brand portfolio includes brands, such as Candie’s, Bongo, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear/Roc Nation, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Ecko Unltd/Mark Ecko Cut & Sew, Zoo York, Umbro, Lee Cooper and Artful Dodger, and interests in Material Girl, Ed Hardy, Truth or Dare, Modern Amusement, Buffalo, Nick Graham Hydraulic and PONY brands. It operates in various geographic regions, including the United States, Japan and Other (which principally represent Latin America and Europe).
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