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American Apparel Inc Common Sto Message Board

  • austinjmalone Mar 8, 2013 10:10 AM Flag


    APP is a super small cap company, around $200 million. If you look at just a few simple metrics and use common sense it is clear to me this stock will easily surpass $3.00 a share in the next month. First, it is important to look at APP's improving financial track record. In the last year the company has had a steady focus on increasing earnings by 25% in 2013 and this has been positively reflected in APP's financials. Finally this last quarter crushed analyst estimates by $.06 and proves that the company is on the path to positive net income in the coming quarters. With APP being such a small cap company, any positive EPS will result in monumental valuation appreciation. The company is one of a handful of clothing manufactures that makes their clothes in the USA. The American consumer has felt the impact of financial hardship over the past 10 years due to economic instability, caused partially by shifting manufacturing jobs overseas. This ultimately has made Americans more aware of the the importance of supporting products that are still American made. Manufacturing and textiles will continue to be a primarily overseas business that moves to where labor is cheap. APP really creates a new type of luxury that is just becoming popular, that new luxury is "Made In the USA". It sounds crazy but kids have grown up with the uncertainty of their parents losing their jobs to overseas companies and this is starting to increase their desire to buy USA products. Overall, consumers are buying APP merchandise for its style but finally the Made in the USA aspect of clothing is allowing the consumer to justify spending a few extra dollars to contribute to the US economy and American worker. Internationally consumers are drawn to APP for similar reasons, wearing clothes that are made in the USA is considered to be a status symbol. With so much room for expansion both domestically and internationally, I see $3.00 easily being achieved in the upcoming months.

    Sentiment: Strong Buy

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