Joes Jeans Inc (JOEZ) is set to report earnings after the market closes on Wednesday July 15th (JOEZ Webcast) . Joe’s Jeans Inc. (”Joe’s”) designs, sources and distributes its Joe’s® and Joe’s Jeans™ branded apparel products to over 1,200 retail doors in the U.S. and abroad. With its competitive advantages and industry expertise in denim-wear and denim-related products, Joe’s produces one of the most recognized and sought-after premium denim brands in the world. Joe’s products are designed internally and sourced to specification from suppliers primarily located in the U.S., Mexico and Morocco. Finished goods are then distributed directly to Joe’s customers from its distribution center in Los Angeles. Joe’s maintains third party showrooms in New York and Los Angeles to showcase its Joe’s® and Joe’s Jeans™ products for its customers. Joe’s has recently has opened a branch office in Paris to distribute its products in Europe.
Joe is expected to put a profit of 2 cents in his back pocket for the 2nd quarter. We expect the high-end apparel company to announce earnings that will beat investors’ and analysts’ expectations.
Since JOEZ only trades at 76 cents, consider this trade to be like an option that doesn’t expire. There is very little analyst coverage on JOEZ, sometimes 1 analyst, sometimes no analysts. However, Joe’s stock does have a nice history of jumping around a bit following earnings releases. Seven of the last 13 times JOEZ reported its quarterly results, the stock zoomed between 16% and 64% in the days surrounding the report. Only 4 of 13 reports saw Joes’ stock price shrink. Twice nothing happened.
Our technical analysis of JOEZ stock chart sees 88 cents as a key trigger point for the stock. If the stock price can break double eights, then there is nothing to stop the stock from traveling to as high as $1.20. On the downside, JOEZ should find plenty of support in the 60-to-65 cent range. Fairly close to its book value of 62 cents.
There is some meat on JOEZ bones too. The stock trades at just 58 cents for every dollar per share the jeans company does in sales. Earnings are also expected to grow at more than 20% a year for the next 5 years. Finally, JOEZ return on equity is a very Warren Buffet like number of 15.70%.
Suggested Closing Price Stop: $0.65
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