Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of retailer Liz Claiborne
So what: The fiscal fourth quarter was actually stronger than expected, with an adjusted loss of $0.03 versus the $0.13 loss analysts expected. But investors are focusing on a 2012 target that falls short of "threshold goals." The company now sees adjusted EBITDA of $180 million to $220 million in 2012.
Now what: Forecasting a year in advance is hard enough, but looking out two years is nearly impossible at the rate consumer preferences change. Because of that, I think the market is overreacting a little bit after a decent quarter. Adjusted EBITDA is still expected to double next year, and as the economy improves so will this stock. I am buying the dip and am cautiously optimistic Liz Claiborne can beat expectations again next quarter. (Click here to read about today's pop in Revlon shares.)
Interested in more info on Liz Claiborne? Add it to your watchlist.