Qualcomm stock is up 13.2% this year, and 42.2% during the past 12 months. Market capitalization has...
Kate Spade: In the Bag
04/30/2015 7:00 am EST
Our latest featured breakout stock sells its clothing and accessories under three brands: Kate Spade New York, Kate Spade Saturday, and Jack Spade, explains Leo Fasciocco, editor of Ticker Tape Digest.
Kate Spade & Co. (KATE) offers apparel, handbags, briefcases, leather goods, jewelry, apparel, footwear, optics, fragrances, electronics cases, fashion accessories, beauty, and home decor products.
KATE's long-term chart shows the stock falling from its all-time high of $46 in early 2007 to an all-time low of $1.46 later in that year. Part of the drop was due to the bear market.
The stock formed a bottom for three years and broke out in early 2012. Since then it has made a four-fold move. More recently, KATE has put down a cup-and-handle base. It is in good position to breakout.
We see KATE's strong earnings outlook being the key driver to send the stock higher. This year, analysts forecast a 134% surge in net to 59 cents a share from 25 cents a year ago.
The stock sells with a price-earnings ratio of 57. That is high but okay given the earnings growth rate this year and next.
Net for the upcoming first quarter should come in at 2 cents a share compared with a loss of 6 cents a year ago. Profits for the second quarter should leap 124% to 11 cents a share from 5 cents the year before.
The Street looks for net for 2016 to jump 66% to 97 cents a share from the anticipated 59 cents this year. We rate KATE a good intermediate-term play, providing earnings meet expectations.
The largest fund holder is the Fidelity Growth Company Fund, 5-star rated, with a 6.4% stake. It was a recent buyer of 12,200 shares.
The largest fund buyer recently was the 4-star rated Goldman Sachs Mid Cap Value Inst. Fund which purchased 1.8 million shares as a new position.
We suggest accumulation of a partial stake in KATE with further buying to be done on a breakout over $35.50. We are then targeting KATE for a move to $44 after a breakout. A protective stop can be placed near $32.50 after a breakout.
More from MoneyShow.com:
Related Articles on STOCKS
Of course, there are arguments as to why China should or should not bow to U.S. demands, and the inv...
Headquartered in New Jersey and founded in 1891, Merck & Co. (MRK) is a global health care compa...
Founded in 1902, Minnesota Mining and Manufacturing (MMM) started as five businessmen set out to min...