This Investor Bought $8.4 Million in Hanesbrands Stock as Clothing Giant Gears Up for Gildan Merger

As of September 30, Gardner Lewis Asset Management reported a new position in Hanesbrands valued at approximately $8.4 million, adding nearly 1.3 million shares.

What Happened

According to a filing submitted to the Securities and Exchange Commission on Monday, Gardner Lewis Asset Management established a new position in Hanesbrands (NYSE:HBI), acquiring 1,277,996 shares. The stake was valued at $8.4 million as of September 30, based on the fund’s quarterly report. This transaction brought the firm’s total reported U.S. equity positions to 75 for the period.

What Else to Know

Top holdings after the filing:

• NVDA: $45 million (about 11.8% of AUM)
• VRNA: $17.7 million (about 4.6% of AUM)
• VBTX: $16.5 million (about 4.3% of AUM)
• MA: $15.1 million (about 4% of AUM)
• UBS: $15.1 million (about 4% of AUM)

As of Tuesday, Hanesbrands shares were priced at $6.42, down 19% over the past year, compared to a 14% gain for the S&P 500 in the same period.

Company Overview

Company Snapshot

Hanesbrands is a large-scale apparel manufacturer and marketer with a diversified brand portfolio and global distribution. It designs, manufactures, and sells basic apparel, including underwear, activewear, socks, and intimate apparel under brands such as Hanes, Champion, Maidenform, and others. The company leverages its vertically integrated operations and established brand names to maintain a strong presence in the basic apparel segment. Its strategy centers on multi-channel sales and international expansion to drive growth and operational efficiency. The company serves mass-market consumers, with primary customers including major retailers, wholesalers, and international partners in North America, Europe, Asia, and Latin America.

Foolish Take

Gardner Lewis Asset Management’s new $8.4 million position in Hanesbrands signals a contrarian bet on value in the same quarter that the clothing company agreed to be acquired by Gildan Activewear in a $4.4 billion enterprise-value deal that would combine two of the world’s largest basic apparel manufacturers. Though it's unclear whether Gardner Lewis purchased the shares before or after the announcement, the move certainly shines a light on the merger, which is projected to result in $200 million in annual cost savings within three years of closing.

The investment also mirrors the fund’s new stake in Interpublic Group, another company navigating an acquisition, underscoring a broader theme in Gardner Lewis’s portfolio—finding underpriced assets poised for transformation. Hanesbrands, whose shares are down 19% over the past year, posted $892 million in Q3 revenue, down 1% year over year, but grew operating profit 14% thanks to cost savings and margin expansion.

For long-term investors, the risk lies in execution: Gildan’s integration plan assumes fast synergy capture and stable demand in a tough retail environment. But if successful, the merger could revitalize two legacy brands and restore pricing power in a slow-growth apparel market.

Glossary

13F reportable assets: Assets disclosed by institutional investment managers in quarterly SEC Form 13F filings, covering qualifying U.S. securities.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or asset manager.
Position: The amount of a particular security or asset held by an investor or fund.
Stake: The ownership interest or share held in a company by an investor or institution.
Top holdings: The largest investments in a fund’s portfolio, typically ranked by market value.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Forward price-to-earnings ratio: A valuation metric comparing a company’s current share price to its expected future earnings per share.
Enterprise value to EBITDA ratio: A valuation measure comparing a company’s total value (including debt) to its earnings before interest, taxes, depreciation, and amortization.
Vertically integrated: A business model where a company controls multiple stages of production or distribution within its industry.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Nvidia. The Motley Fool has a disclosure policy.