Stock of the Day
After a lengthy pullback month-to-date, TRLG is getting a nice pop today on the news that the stock has been approved for listing on the Nasdaq. So far, the stock has traded on the bulleting board. But starting tomorrow, it will trade on the NNM.While this doesn't change the fundamentals of the company, which by the way are quite good, it should increase interest and awareness of the stock. Hopefully, some more analysts will decide to initiate coverage on it, and that could create more institutional demand for the shares.
TRLG is down due to the overall pullback in the market, the schmeissing that retails stocks have endured lately, and the concerns about the potential for a denim glut at retailers. I think these concerns are priced in, and the stock still offers ample upside as it is still in the early stages of its growth phase.
long TRLG
posted by J. Kahn @ 12:01 PM
7 comments
7 Comments:
While I agree with you that it's chart looks fantastic and its balance sheet is a growth investor's wet dream, I have to question your take on the future fundamental picture. It's been my experience that the premium clothing lines, especially those that are so reliant on one product are likely to fizzle as quickly as they sizzled. True Religion jeans only took off after several A-list stars were spotted wearing them. Seems to me that once Kate Hudson gets spotted in US Weekly wearing some other brand, the race will be on to buy those and True Religion's sales will dry up. That is the problem with $180 jeans. You aren't buying the jeans, you are buying the image. Once the image is no longer desirable, neither are the $180 jeans.
I hear what you're saying, Kevin. But as someone who works in Beverly Hills and whose wife follows these trendy fashions, I can tell you that they are still plenty hot.
I am not making the case that this is a long-term growth story, but they are hot right now. My bet is that at some point over the next 6-12 months, the stock will trade at a higher multiple, and we will be able to realize a 30-50% gain.
I think this is an interesting stock because if you enter a position right now, you can probably make money on both the long and short sides. In other words, you are both probably right:
TRLG probably still has some fire under it (I did some talking to retailers last weekend in Calabasas, and they say it is still hot), but my fashion-forward friends are telling me that it isn't cool anymore and Antiq and Rock & Republic are the jeans to have now.
Let's go long until the end of the year...
So I guess a more important question is "who makes Antiq and Rock and Republic?" Maybe we can get in on the next 15-bagger.
Pardon my ignorance - We Buckeyes ain't as fancy as y'all high-falootin' Californians :).
Regardless, I'll probably take a closer look here. I need an excuse to unload my PSUN, anyways.
Nice try, Kevin. I was born and raised in Cleveland, and still root for the Browns, Indians, Cavs, as well as O State!!
The maker of Antiq is Blue Holdings (BLHL). Don't bother... the market cap rivals that of TRLG with 1/10 the revenue.
We have to look even further ahead of the trend... I say Daisy Dukes are coming back.
We're at a buying pivot point right here as we hover just above the 50dma. I agree with j. kahn and his analysis, there is a lot more upside here. The eps is based on TTM which currently includes 2 flat quarters. When those 2 quarters are replaced with the current and following quarter, we all will be wishing we bought more at this price level.
Listen to JWN's latest CC. Sales are robust in premium denim for Males, Females, and Kids. They compensated the demand by increasing replenishment and allocating more room on the floor to showcase the premium denim (anecdotal observation by GS analyst).
ANF obviously had a bad quarter. But on their latest CC, their denim sales were up 97% from same quarter last year.
goodluck.
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