Ronnie Moas Upgrades Lexmark And Buckle: Here's Why
Lexmark International was upgraded by the firm from Hold to Buy with a price target of $29.49.
Moas has additionally set a price target at $37 for 2017-2018, with a dividend yield of 4.4 percent. "When the market collapsed in the summer I reinstated LXK (on August 26). I closed the position out on October 23 with a 24 percent gain," he said.
"LXK shares have since come back down to where they were in late August and can be reinstated. LKX [sic] is exploring strategic alternatives and there has been heavy put selling recently. $29 may be a floor for this name trading at 8X and 10X cash flow with very low short interest," Moas commented.
In the same note, Moas upgraded Buckle from Hold to Buy with a price target of $29.84. Moas set a price target of $36 for 2017-2018, with an attached dividend yield of 3.3 percent.
Shares of Buckle are currently trading at 10X with 10 percent of the market cap in cash with no debt.
"Insiders own 40 percent of the company. This name ranked #14 out of 400 names in a recent Russell-2000 report I put out (according to my 155-variable computer model). Comps came in better than expected this morning at minus 5 percent (and that may be squeezing the shorts in this name with a low float)," Moas said.
Moas further noted present risks associated with the retail apparel space in the current market environment, stating, "BKE competes in [that risky space] and [I have] resisted the temptation to upgrade BKE as it dropped through the $50 and $40 marks last year. At $30 I am willing to take a shot at this. This is a rough industry with competition from H&M, Zara, Forever 21, ANF, AEO, GPS and others."
"There has been no insider selling -- insiders maintaining a $600 mln stake (40 percent)," Moas concluded.
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Latest Ratings for BKE
|May 2016||Wolfe Research||Downgrades||Peer Perform||Underperform|
|Apr 2016||Deutsche Bank||Initiates Coverage on||Sell|
|Mar 2016||Standpoint Research||Downgrades||Buy||Hold|
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