Reader Question – Zumiez
Q) FAISAL, you named things in Zumiez favor last June. After bouncing $14 from the Aug/Sept lows of $20-ish to $33s+/34.00 during October, the shares have fallen for 30 days from $34-ish and o make a $7+ dip to $27-$28. ZUMZ is also down $11-$12 from the Spring/July $38 highs. Meantime updating the good growth story, October 2006 sales cranked: total +51% same store sales +16%. On wednesday during the earnings conference, the company was stingy on 4th quarter holdiay earnings guidance, but top line sales are building well above managmeent guidance of 5% same store sales, setting up for an EPS blowout?
A) Absolutely. Zumiez is one of my fav retailers, but it is expensive andvolatile. I would not recommend it for the faint hearted, but for my money,it has the best risk reward.
– Faisal Laljee
i dont see why if SSS are solid, why the shares would not
zip from 80 cents off the lows of 27.20 to as much as $2.30
off the lows or $29.50 by this FIRDAY. beware that would be a 10% bounce off the recent lows and so comes a newer situation, profit taking yoyos. still longs down from that towards 28+
dash and flips near 30 would have tradeable aspect.
man the marvelous Zumiez ripped through $30.00 on thursday after the sky high sss report. now the bounce off the lows 27.20/28.00/26s is $5-$6 and iam not sure there is much short term upside left. sold in $31s after 31.78 tip. would like to think there is more recovery action, but longs in 29s
would be better then this. it was interesting in premarket how no shares were sold in the 29s, while everyone was afraid of the round number 30 resistance, i added to position in premarket..
29.70 & 29.90 much to chagrin of fearful associates.
Keep at it. I believe you can ride this one through the end of Dec. Look to get out of part of your position around 35.
i agree. and doubt the round number 30.00 resistance price point is going to meaningfully stop the bounce action or velocity. fridays dip back to the 29s would have been a sweet spot to add to positions. total dip was 31.79 > 29.35. i jumped the gun a little early friday morning and bought back half the 31.20 flip around average price of 30.40.
this week i flipped ZUMZ
for a second time around 31.60s
slightly better then the first time on last weeks sales numbers.
on friday dec 8, the shares dipped as much as $1.76 off the 32.67 high. between tue-thur 4 brokerage houses initiated covered, and i believe the shares ought to bounce between 30.00-ish low end and 32s high end. i like the friday dip 32.67 > 30.91 to open longs,
but iam not sure how early to buy on the dip this would be. boris.
man Zumiez soared to $31.10 wednesday only to tip $2 by the end of the day. the president sold 150,000 shares in the morning around $30.75 and down. it was like pouring water on a fire. dumb. flipped it twice in nik of time, but not this time.
that $5.70 dip is a crusher. iam beginning to think that $32.60s high end might have been a multi- week top leaving longs holding the bags. i wonder if the Decemeber sales report is gonna help. the 4 houses starting coverage 2 weeks ago has done little to put a bid under the shares. crap!