Here's what I like about HOTT:
1. The merchandise is cheap and has a rebellious appeal, that's trendy these days among teens. These kids are watching Mom and Dad lose everything and it affects their view of things.
2. Plenty of merchandise not made of cotton, which is a huge cost driver. All kinds of trinkets and posters and stuff you can grab for less than $10, which is probably within the budget of many cash-strapped teens.
3. The stores are small, and therefore I assume they have lower rents than a GAP or an American Eagle outfitter.
The price action seems okay, the stock hasn't sold off too bad in this market route, plus the market cap isn't exactly huge. Insiders are buying so I'm guessing they think this is their meal ticket.
Anyway, that's my take.
Torrid is part of Hott holdings as well. It is doing a good internet business for the plus size lady crowd. One of the only places a bigger gal can get decent trendy clothes. From a sampling of my facebook friends, 0 had heard of Torrid two years ago and now all my friends of size shop there.
"You gotta admit, like the stock or not, if the Euro contagion hadn't spread to Italy and Spain this week HOTT would have been trading much higher, tried to do it yesterday when it shot up to $7.16 at the open only to get slapped back down on the Italian bond news."
I agree, their inability to solve problems in EZ, depress whole stock market. That said, i still feel you are here playing chicken, with hot turkey.
Okay, Take care my friend!
Can't get out right now, underwater again, only managed to sell half of my shares when we spiked to $8.70 on 10/24. Actually, it wasn't exactly a case of "managed to sell"....I needed a certain amount of cash for another purchase, sold enough to get what I needed at the time, and part of it was greed, thought the half I kept would be worth more if the price had kept trending up like it was back then (oops).
Now it's "wait for that teenagers to start snapping clothes off the racks when the new Twilight movie opens tonite", which should send sales skyward for a month or two, hopefully propelling the pps up too, at which point I'll bail on my remaining shares.
You gotta admit, like the stock or not, if the Euro contagion hadn't spread to Italy and Spain this week HOTT would have been trading much higher, tried to do it yesterday when it shot up to $7.16 at the open only to get slapped back down on the Italian bond news.
I appreciate your case, even I disagree rather strongly.
Valuation is hefty for an unprofitable retailer which is shrinking. To me it looks HOTT is heading for a restructuring. This is just technical rally without real fundamental support (=earnings & sss-growth).
When technical support is disappearing, Get ready to pull trigger in five seconds, or LESS.
Okay, take care!
Got news for you - they've already done with their restructuring, closed all the deadbeat stores (that's one of the reasons their earnings got whacked the last couple quarters), but now they're making plans to open a slew of new ones in better locations w/lower rents.
Looking at the estimated growth rates from the stats page, things look even rosier:
Growth Est | HOTT | Industry | Sector | S&P 500
Current Qtr. | 80.00% | 16.80% | 30.40% | 21.80%
Next Qtr | 66.70% | 28.70% | -3.40% | 28.30%
This Year | 2,200.00% | 19.40% | 43.10% | 12.70%
Next Year | 38.10% | 18.20% | 20.70% | 13.90%
If they accomplish that they'll not only trounce the retail industry growth rates, they'll beat every other comparator you care to look at.
All that said, except for the piddly 3% yield this has been dead money for me for over 1 1/2 yrs, I have other stocks on my target list with better/stronger growth prospects and divs, took advantage of yesterday's brief jump to dump half of my position at $8.70 (13% profit, not much but I'll take it!), then set a trigger to sell the rest at $8.75 while I went to run errands. I came home and found it came within one penny of my limit order, but couldn't crack the 52 wk high of $8.74, and today it's crashing back to reality.
Oh well, I got enough cash out to buy the stock I wanted to invest in immediately, has news coming out within a month or so and needed to get in before the expected pop. I'll wait for another good day to sell the rest, might as well wait until I get the re-invested div shrs at this point before I close my position, only 5 business days before I get them. But next time I'll put in my order for exactly $8.74 unless the pps blasts thru it on a quick jump (unlikely).
GL those who stay, you should do ok, I've just run out of patience here.