|Instrument:levi strauss & co|
Levi Strauss Co.
Levi Strauss Co. (NYSE: LEVI) is a popular U.S. clothing company, best known for its Levi’s brand of denim blue jeans. The company has a history stretching back over 165 years, having been founded in May 1853 in San Francisco by Bavarian immigrant Levi Strauss. The original company was opened as a west coast branch of Levi Strauss’ brothers New York dry goods store. The headquarters for the company remains in San Francisco to this day.
While Levi Strauss Co. is a U.S. company, the corporation has a global presence and is organised by geographic responsibility. Levi Strauss Americas is headquartered in San Francisco and serves North and South America, Levi Strauss Europe has its headquarters in Brussels and serves the European Union and neighbouring countries, and Levi Strauss Asia Pacific, Middle East and Africa serves Africa, India, the Middle East, Asia Pacific, and Australia.
Levi’s are somewhat ubiquitous in culture and are worn by people from all walks of life from blue collar workers to celebrities to Nobel Prize recipients. Both Marlon Brandon and Albert Einstein wore Levi’s products, with the leather jacket worn by Einstein having been made in the 1930s sold at auction by Christie’s in 2016 for £110,500.
The Beginnings of Levi Strauss
Levi Strauss Co. began in 1853 by Bavarian immigrant Levi Strauss, who served as the sales manager for the company, while his brother-in-law David Stern was the general manager. Soon after the company was formed a Reno Nevada tailor by the name of Jacob Davis began buying denim bolts of cloth from Strauss. Davis noted that one of his customers was continually purchasing this denim cloth to reinforce his torn pants and he came up with the idea of using copper rivets to reinforce the strain points of trousers, such as at the base of the button fly, and at the corners of pockets. Since Davis didn’t have the funds to patent the idea, he contacted Strauss to suggest the two go into business together. Levi accepted the offer and the two men subsequently received U.S. Patent 139,121 on May 20, 1873, covering the rivet idea. Soon after that, the rivet was incorporated into the denim jeans design at Levi Strauss and was used in its advertising campaigns. Despite later advertising suggesting Levi Strauss jeans were first designed and sold to gold miners during the California Gold Rush, which peaked by 1849, Levi Strauss didn’t begin manufacturing denim jeans until more than 20 years later in the 1870s. The famous 501 series of jeans was launched in the 1890s.
When Strauss passed away in 1902, he left the company to the sons of David Stern, who also happened to be his nephews. In 1928 Walter Haas, who was the husband of David Stern’s fourth son, became the president of the company. The Haas-Stern family remained in control of the company until 1971 when Levi Strauss first went public. That lasted for 14 years until the Haas family regained control of the company in 1985 and made it private once more. More recently, in March 2019 Levi Strauss went public for a second time on the New York Stock Exchange with the ticker symbol LEVI in an IPO on March 21, 2019, with shares priced at $17 a share.
Current Levi Strauss Products
In 2020 Levi Strauss makes nearly all its products outside the U.S. Developing countries like Vietnam, Indonesia, Sri Lanka, and India provide low cost labour, and inexpensive raw materials, making them superior to the U.S. for cost savings. However, some lines of clothing remain produced in the U.S., most notably the Levi’s Vintage Clothing line and the Levi’s Premium line. While Levi’s is considered synonymous with jeans, the company actually produces far more than denim jeans in 2020. They also produce leather goods, skirts, dresses, shoes, accessories, socks, underwear, sweaters, jackets, shirts, and even eyewear. The denim jeans have evolved into many styles and fits, with current categorisation including relaxed, taper, flare, bootcut, straight, slim, skinny, and a big tall line. The original 501 series of jeans has styles for both men and women, but other 500 series jeans are designed only for men. The 300, 400, 700, and 800 series jeans are designed for women.
Levi’s Stocks Price History
As mentioned above, Levi Strauss remained a private company for much of its existence. It is only very recently that the company has been taken public for the second time in its over 165 year history.
The IPO price for Levi’s stocks was $17 a share. It did well in the first month of trading, hitting a high of $24.19 and closing out the month at $22.19 a share. Things haven’t been so great since then, however.
The stock trended lower throughout the spring and summer of 2019, hitting a low of $16 a share in August 2019. It does look as if that’s something of a floor for the stock though. It has been trading sideways through the end of 2019 and heading into 2020. The floor of the trading range is $16, as mentioned, and the ceiling of the range is $20 a share.
Levi’s Stocks Trading Ideas
Because Levi’s stocks have a very limited time that the stock has been active, despite the company itself being over 165 years old, it is harder to analyse it on a technical basis. That aside, the recent behaviour of the stock does indicate that it is currently range bound, and that’s something traders can take advantage of in two ways.
The first way to take advantage of the current price action in Levi’s stocks is to trade the top and bottom of the trading range, selling when the stock reaches the top of the range and buying when it reaches the bottom of the range.
A second way to take advantage of this trading range is to watch for breakouts from the trading range. The problem traders might have with that strategy is that the lack of price history will make it difficult to determine a price target based on the price history and action of the stock.
Bear in mind that Levi Strauss is a mature company, and it won’t see spectacular growth. Consumers will continue to buy jeans, but since Levi’s is about as good as it gets in jeans, it simply isn’t fair to expect double digit growth from the company. One possibility investors can look forward to is increased dividends from Levi’s stocks, which would also help support the stock price.
Levi’s stocks are another chance for traders to look for opportunities in the range bound nature of the stock. Buying at the top of the range and selling at the bottom of the range probably sounds boring and mechanical, but it also has the potential to yield profits if traders can avoid losses, and that’s why we trade isn’t it.
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Levi’s Stock FAQ
- Why should I trade Levi Strauss shares?
Anyone who wears blue jeans has almost certainly heard of Levi Strauss and their line of Levi’s jeans. With a history stretching back to 1856 the company has become a household name when it comes to apparel. Trading its stock has only been possible for a short time though, as the company had its IPO in March 2019. Since then investors have gladly been trading the stock, with over 1 million shares changing hands on a daily basis. With such liquidity, and a good dose of daily volatility, Levi Strauss shares are a good choice for those who want some exposure to the apparel sector.
- Is Levi Strauss the best apparel stock for trading?
Obviously the apparel sector is a large and very competitive arena. There are many different brands of clothing to choose from, and many different apparel stocks to choose from as well. For some traders Levi Strauss will be the best choice when trading apparel stocks, because they have a good idea of the business strategy of the company and of the price action of the stock. Others will find better opportunities in other apparel stocks. At the end of the day, given its high liquidity and regular volatility, Levi Strauss is a good choice for anyone who wants an apparel stock to trade.
- What’s the best strategy for trading Levi Strauss shares?
The best trading strategy for Levi Strauss shares is going to depend on the trading style of the investor. The stock has enough daily movements for scalpers and day traders to be able to potentially profit from the volatility. Swing traders can also make potential gains with Levi Strauss shares, although it might not be as easy for this group since the stock doesn’t have a history of trending most of the time. As market conditions change the best trading strategy for Levi Strauss is also going to change, so the best recommendation is to keep an open mind and be ready to use whichever strategy will work best at that time.