NEW BULLISH Plays
Land's End, Inc. - LE - close: 47.47 change: -0.19
Stop Loss: 45.95
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on November -- at $---.--
Listed on November 01, 2014
Time Frame: 8 to 12 weeks
Average Daily Volume = 468 thousand
New Positions: Yes, see below
Why We Like It:
LE is in the services sector. The company was recently spun off from Sears Holding (SHLD) in April 2014. LE is probably best known for its catalog sales. They've grown into more than just a catalog. According to a company press release, "Lands' End, Inc. is a leading multi-channel retailer of casual clothing, accessories, footwear and home products. We offer products through catalogs, online at www.landsend.com and affiliated specialty and international websites, and through retail locations, primarily at Lands' End Shops at Sears and standalone Lands' End Inlet Stores. We are a classic American lifestyle brand with a passion for quality, legendary service and real value, and seek to deliver timeless style for men, women, kids and the home."
Now that LE has been unshackled from the Sears behemoth the company can shine on its own. Their most recent quarterly report was back on September 10th. LE reported a profit of 37 cents a share. That's up from 35 cents a year ago and significantly above Wall Street's estimates that were down in the 17-to-24 cent range. The direct sales business, which accounts for 83% of the company's revenues, said sales were up +7.1%. Gross margins rose 310 basis points to 48.5%. Their operating income was up +37.6%.
It has been a volatile year for shares of LE. That might be due to all the short interest. The bears have been getting killed. LE has bounced back toward its highs but the short interest is still at 4.3 million shares versus the float of 13.6 million. That's more than 31% of the float and definitely a receipt for another short squeeze. Right now LE is hovering just below resistance in the $48.00-48.25 level and if shares can breakout it could definitely spark some short covering.
Christmas is less than 54 days away. This year consumer spending is supposed to be above average. Online shopping should do exceptionally well this year. All of this bodes well for LE.
Tonight we are suggesting a trigger to open bullish positions at $48.50. We are not setting an exit target tonight but I will note that the point & figure chart is bullish and forecasting a long-term target at $67.00.
Trigger @ $48.50
- Suggested Positions -
Buy LE stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the DEC $50 call (LE141220c50) current ask $3.90
Option Format: symbol-year-month-day-call-strike