Market Overview

PreMarket Prep Stock Of The Day: Canada Goose

PreMarket Prep Stock Of The Day: Canada Goose

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

As technology and growth stocks take a breather in the rally off the March low, value and beaten-down stocks have taken the baton. The retail sector, which has been one of the sectors punished the most and slowest to rebound, has come back to life.

One issue on the move in today’s session is Canada Goose Holdings Inc (NYSE: GOOS), making it the PreMarket Prep Stock Of The Day.

Out Of Favor Since November 2018

From its IPO opening day close of $16.08 on March 16, 2017, the issue bottomed on March 28 at $15.20 and embarked on an incredible rally.

With only a few interruptions on the downside, the issue did not peak until November of 2018 at $72.27. It could not sustain that elevated level and backed off to end 2018 at $43.72.

Rebound In 2019 Fails

Canada Goose attempted to rebound in early 2019, reaching $59.94 before the downtrend resumed. It ended the year just off the yearly low ($33.38) at $36.04.

It did not participate in the rally with the broad market in early 2020 and shed another 24% by the end of February, falling to $27.57. The decline was far from over as the issue swooned to a new all-time low in March.

The issue bottomed out a few days ahead of the S&P 500 index on March 18, a few dollars below its former all-time low at $12.94, and began to rebound.

Muted Rebound Until Q4 Report

Before today's open, the company announced an EPS loss of 12 cents on sales of CA$140.9 million. Although the report was not that impressive, it does not seem to matter as investors are hungry for beaten-down stocks, especially retail stocks that have yet to rebound.

After a higher open, it had only a nine-cent retreat to $22.91 before resuming its move higher.

The continuation rally took the issue to $25.01 but fell back into the mid-$24 handle at the time of writing. That high matches its April 30 high of $24.99, but is shy of the high for the rebound from April 29 at $25.64.

Moving Forward

Despite having its best day since March 24 ($15.96 to $18.73), investors may want to be cautious about how high the rally will take the issue, especially since the company stated: "the negative financial impact of Covid-19 will be more pronounced in the first quarter ending June 28.2020, with a negligible level of revenue expected."

For now, price does not lie and the issue has gained some upward momentum. In order to add to that momentum, it would need to breach the rebound high and better yet, post a close above the current high for the rebound at $24.99.

The entire discussion on the issue from today’s show can be found here:


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