I don't have quite the same conviction with retailer Buckle (BKE) as I have with some of these other names I've held through earnings, so with the company reporting Thursday and the stock now testing its 50 day moving average I am following the game plan and cutting back. Perhaps more ominous "might" be the formation of a series of lower highs over the past month - we don't like that. I've cut this back in the $48.40s from a 1.4% stake to a 0.4% stake, pending more information Thursday.
While I hate the consumer trade, there are basically 3 "youth oriented" clothing stores hitting their same store sales during the past year - Buckle, Aeropostale (ARO), and Urban Outfitters (URBN). The former 2 report Thursday and it was a toss up deciding which one of those 2 to buy so I get some 'consumer exposure' (one of the only things working in the market the past 2 months)
So we'll see how the results are Thursday - both companies have been reporting 20% same store sales figures, but it simply makes little sense to risk much capital ahead of earnings when even great reports (in the wrong) sector are punished. Is retail the wrong sector? I don't know. That changes by the day in this new era of market. Last week it was the right sector. By Thursday it could be the most hated sector. It depends on what site of the motherboard the hedge fund computers wake up on I suppose.
We'll assess these 2 names again Thursday and either continue on with Buckle or maybe make a switch. One of my 3000 strong analysts (readers) reported to me via email that the Houston store (Buckle) was nearly empty when he visited, which seems to be in direct contrast to their same store sales so we'll see in 48 hours. ;) Until then and without the ability to short some of these consumer discretionary names breaking down, I'm playing this market like a 89 year old granny: conservative.
Now... where are my teeth?
Long Buckle in fund; no personal position
Did you like this article?
's
