Today, I am recommending purchase of iconic clothing company Levi Strauss (LEVI), which had a tough 2023 thanks to a combination of uneven sales results and higher expenses. However, a lot of good is happening under the surface with management is putting greater emphasis on direct-to-consumer sales, which will help raise margins over time by cutting costs of doing business with physical retailers.

Direct-to-consumer sales are now 40% of overall LEVI revenue, climbing 13% in the most recent quarter alone. As a result, earnings per share should expand 18% this year to $1.30 from what looks like a final 2023 figure of $1.10. At a relatively modest 12.5X this EPS projection and a big ramp on the direct-to-consumer front,, the stock is very attractively valued.

Buy LEVI in the core portfolio under $17 as I target $20. The 3% dividend yield will add to total returns. I will be back next week with a market overview and earnings preview for our companies.