Did Michael Kors Just Give You a Huge Buy Signal?

In this video, consumer goods analyst Austin Smith discusses how insiders at luxury retailer Michael Kors Limited (NYSE: KORS  ) opted to hold onto many of its shares after the insider lockup period expired. Although this did not allow many investors to scoop up shares at a discount as they had hoped, insiders' confidence may indicate even more growth for the soaring company. While competitor Coach (NYSE: COH  ) expects half as much growth as Michael Kors, Coach is trading for less than a third of Michael Kors' multiple. Either company could be a profitable venture into the luxury retail space. He recommends staying away from smaller, more risky companies like Joe's Jeans (Nasdaq: JOEZ  ) .

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Austin Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Tiffany & Co. Motley Fool newsletter services recommend Coach and True Religion Apparel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (1)

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  • Report this Comment On June 27, 2012, at 11:46 AM, TheeMadCatte wrote:

    I appreciate you keeping people out of my Joe's Jeans (JOEZ) stock, then I can continue to buy at substantially discounted prices.

    See you at $10.

  • Report this Comment On June 29, 2012, at 3:57 PM, TurbulentTime wrote:

    I understand that Joe's Jeans may not have the nicest financial statements for its investors as of now, yet it is a turnaround story and is seeing its sales through Macy's outperforming their previous expectation. Yes, there are still lots of uncertainty surrounding Joe's Jeans, but if we are to wait for all the uncertainty to go away before buying its shares, its shares will have risen a lot higher from their current levels already. Also, Joe's Jeans is expanding its retail store locations on high-end shopping centers. I usually love to keep my eyes on what Wall Street abandons. For example, Wall Street abandoned KKD during 2008-2009, I bought 2,000 shares at $1.5, $1.75. Wall Street abandoned CROX and its shares was $1.2 as its lowest level, yet I bought 1,000 shares at $3 and 2,000 shares at $5.25. True Religion is a good one, I am also loving that trend of the company. I may initiate positions with True Religion if it will see bumps in its coming earning reports.

  • Report this Comment On June 29, 2012, at 6:11 PM, Bigmike77 wrote:

    It is hard to hate Joe’s Jeans when it is trading a couple of pennies over book value. The company is on target for over 100 million in revenues and has an extremely modest market cap of 68 million.

    Last quarter we saw the following highlights:

    • Consolidated first quarter net sales increased 23% to $26.0 million;

    • Retail store net sales increased 40%;

    • Retail same store sales increased 22%;

    • Wholesale net sales increased 19%; and

    • Operating income increased 244% to $1.8 million for the first quarter of fiscal 2012.

    Let's not forget that they are planning to open 10-15 retail stores a year until 2015 and landed a substantial contract with Macy's for a new product line called Else Jeans.

    Else Jeans opens a whole new market for JOEZ targeting the middle class. Not the typical luxury goods consumer Joe's has been selling to for over ten years.

    JOEZ recently announced that it has entered into a new multi-year international distribution arrangement that according Mark Crossman, CEO and President: “By moving to a distribution model, we will reduce corporate overhead and increase profitability while preserving international growth potential.”

    Everyone is entitled to their own opinion. My personal view is that you have to follow the numbers.

    In my eyes, the best part of the equation is Joez achieving same stores sales growth of 22%. Especially considering the company is aggressively planning to open new retail stores every couple of months (you can verify this information by listening to the CFO presentation at the 14th Annual ICR XChange Conference)

    I have yet to find another value and growth play I would rather invest into.

    Will Joes successfully execute their expansion plan over the next year? I think we should get a clearer picture in July when the second quarter 2012 results are released.

    I have my popcorn ready.

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