Moas: Why I'm No Longer Buying Guess

Loading...
Loading...
  • Standpoint ResearchFounder and Director of Research Ronnie Moas recently downgraded Guess?, Inc. GES from Buy to Hold.
  • The main reason behind the downgrade is Moas’ belief that the shares are –currently- fairly valued.
  • Shares of Guess are up more than two percent on Tuesday trading.

The expert notes that shares of Guess have surged roughly 35 percent since the beginning of May, hitting a 52-week high on Tuesday. Trading at 22 times the 2016 earnings estimate – and 21 times the trailing twelve months earnings, the shares seem fairly valued, he adds.

Moas also points out that, while there is no revenue growth, the company does offer a 4 percent dividend yield -- and has 23 percent of its $2 billion market cap in cash with no debt. However, the expert explains he can no longer maintain a Buy rating on this name due to the recent absolute and relative (to the S&P) rise.

A Closer Look

Guess? was Moas’ recommendation from August 2014. He is now exiting the name “with no absolute or relative gain/loss.” He highlights, nonetheless, that the current situation is worse than what it was at the time he made the original recommendation a year ago, so exiting at break-even seems reasonable.
Moas concludes, since two other research firms boosted their price targets for Guess? On Tuesday morning, driving the shares up, he would sell into this strength.

 

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Loading...
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorLong IdeasDowngradesPrice TargetAnalyst RatingsMoversTrading IdeasRonnie MoasStandpoint Research
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...