Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Some retailers are constantly changing their daily sales, or bringing out hot new merchandise. Similarly, retail stocks have constant price fluctuations. In this column, I like to point out a few notable daily moves made by big retail stocks and let you know whether or not you should be concerned about the stock move, or buy more.
Shares of Crocs jumped 5.05% today after the company reported earnings this morning prior to the opening bell. Revenue came in at $229 million, better than the $225 posted during the same quarter last year, and higher than the amount analysts expected of $221 million. Earnings per share hit a negative $0.20, worse than the $0.05 posted last year, but better than the loss of $0.22 that Wall Street was expecting. The company attributed the better-than-expected results to a 7% increase in wholesale revenue and positive results from its global expansion efforts.
Another clothing retailer, Urban Outfitters, didn't have quite as good of a day today as shares dropped 1.57% this afternoon. The move lower came with very little news and below-average trading volume. Furthermore, the stock was upgraded just last week by an analyst at Brean Capital. The previous rating of hold was changed to buy while the price target was moved to $43. The analyst feels that the company's price is very favorable considering the fundamentals. But, while this all may be true, this group of teen apparel retailers has been having a rough few months; it appears that teen fashion trends are changing faster than most of the retailers can keep up with. While each player in the market should be looked at separately, sometimes the market doesn't always follow that rule, which means the Brean analyst just may be onto a good opportunity.
Lastly, shares of the struggling supermarket SUPERVALU increased by 2.15% today. The jump higher comes at a time when deep value investors are likely the only ones taking on the risk involved with owning shares of this company. SUPERVALU is unprofitable, heavily indebted, and has very few prospects for growth in the near term. The company's only hope is if management can somehow begin to attract more clients, while keeping costs low and increasing margins -- a near impossible challenge. But for those risk takers, the stock is only trading at 0.1 times sales, which means that, if a miracle does occur, this would likely produce a big payday.