5 Apparel Pair Trades To Try In 2016

With market volatility and worries about the commodity downturn, China’s economic weakness and rising interest rates weighing on investors, now may be a good time to opt for the relative safety of pair trades as a hedge against a bearish stock market turn.
 

In a new report, Morgan Stanley analyst Jay Sole discusses five apparel pair trades the firm recommends this year.

“We believe multiples will generally rise on both a relative and absolute basis, but in case they don’t and 2016 is like 2015, 2008 or 2000, we like pair trades,” Sole explains.
 

Related Link: 12 Biotechs With Binary Events Coming This Year
 

The pair trades that Sole includes in the report were identified based on differences in EPS versus consensus and valuation.
 

Here are the five trades he likes for 2016:
1. Long: Nike Inc NKE
Short: Under Armour Inc UA
2. Long: Hanesbrands Inc. HBI
Short: VF Corp VFC
3. Long: Sketchers USA Inc SKX
Short: Steven Maddedn, Ltd SHOO
4. Long: Genesco Inc. GCO
Short: DSW Inc. DSW
5. Long: Childrens Place Inc PLCE
Short: Columbia Sportswear Company COLM
 

Disclosure: the author has no position in the stocks mentioned.

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