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Pacific Sunwear of California Inc. Message Board

  • pouchdepotinc pouchdepotinc Oct 14, 2011 3:13 PM Flag

    Shorts

    I have to say that i am really surprised that there are still so many shorts in this stock (22+%). Although they have been quitely and ever so slowly getting out, the risk reward seems so great to me for them. With the recent up tick in retail and the renegotiation of over 80 leases, i truly belive there is little down side and at least $3 to $4.00 in the upside. The Greeks mind you, own most of their stock in the $4-5.00 range.
    Good luck longs,

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    • You make a very valid point pouchdepotinc. While PSUN has clearly floundered over the past few years, the risk-return equation does not look good for shorts here. The current price is 50% of consensus analyst estimates. As for whether those estimates are optimistic or pessimistic, we can confidently say that PSUN lowballed the forecast on its last earnings call because that was right after the debt-ceiling debacle and PSUN wanted to set expectations that accommodated a terrible retail environment. But in reality, retail has done quite well since that time.

      That said, I actually hope we retain a large short position until the next earnings release, as that would give us an unusally large pop if PSUN does indeed surprise to the upside in any significant way.

      I have a feeling that shorts are indeed exiting slowly, and that's what has brought PSUN up to $1.30 from the low $1.1s. We'll see when the next set of data comes out.

      Good luck to my fellow longs.

 
PSUN
2.09-0.08(-3.69%)Jul 23 4:00 PMEDT

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