Top picks 2012: G-III Apparel Group
Good earnings, Calvin Klein expansion and short interest could spur a rally.
By Todd Salamone, Schaeffer's Investment Research
In early December, G-III Apparel Group (GIII) reported quarterly earnings of $2.16 per share as year-over-year revenues rose 13.3%.
Earnings topped estimates of $2.14 per share, after two quarters in which G-III missed estimates. Additionally, the company announced an agreement to open Calvin Klein Women’s Performance stores in the U.S., China and other countries throughout the world.
G-III shares responded favorably to the earnings and licensing news, which could be the catalysts for a turnaround play in the stock in 2012, following a dismal performance in the last seven months of 2011.
From a technical perspective, we view the November/December low at the 80-month moving average as a potential pivot point, as the trendline supported the stock in 2002-2003 and again in 2004-2005.
The latest news also pushed the shares back above the $22.50 area, which is half G-III’s all-time high set in April 2011 and such levels often provide strong support.
With G-III’s short interest near all-time highs after a pullback to long-term support and favorable catalysts heading into 2012, G-III is an attractive speculative play.
A short-covering rally in 2012 could rejuvenate G-III shares, which are still up by more than 500% over the past ten years.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The solid report comes a month after the retailer closed all of its Canadian operations.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.