Time To Buy J. Crew (JCG, ANF, ARO)

J. Crew JCG is an outstanding retailer. But, the performance of its stock has been nothing less than horrific. Here are the numbers: YTD to the stock is down 27.60%. In the last three months as the markets have rallied the stock has fallen 11.6% while the Dow (DJIA) has rallied nearly 8%. The stock trades for less than 13x next year's earnings estimates and is expected to grow 18% next year. The company outperformed during the Great Recession and stole market share from competitors like Abercrombie & Fitch ANF and Aeropostale ARO. Worries about discounting and sourcing costs have pushed the stock lower in 2010. But, such concerns are likely discounted in the share price already. J. Crew has a strong brand and its CEO, Mickey Drexler, is one of the most talented in the retail business. I have been buying shares under $32 and will continue to buy as long as shares hold the $30 level, which was their early September low. If shares cross the 50-day MA at $33.6 it may be smooth sailing to the 200-day MA at $39.90.