Hanesbrands: Value Play or Value Trap?

Hanesbrands Inc. (NYSE: HBI), manufacturer and marketer of popular apparel brands such as Hanes, Champion, and Playtex, has been on a bit of a roller-coaster ride the last couple of years. Its stock price has increased about 20% since reaching its 52-week low just over five months ago. Yet it still has a way to go to recover from its all-time highs set in April 2015. Hanesbrands stock is down 34% from its peak levels. When a company with well-known brands like Hanesbrands gets whacked, it's worth evaluating whether the market is presenting investors with an opportunity. Let's take a closer look to see if that's the case with Hanesbrands.

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The simplest and most straightforward measure of value is the price-to-earnings (P/E) ratio, which measures a company's share price relative to its earnings per share. With Hanesbrands stock trading at 16.5 times its trailing-12-month earnings, the stock of this underwear maker appears to be a bargain. According to data from S&P, the average P/E ratio of Hanesbrands over the last five years is 22.6.

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Source: Fool.com