For Comparative Purposes, Joe's Jeans stock is most closely related to True Religion Apparel. Both are in the premium denim arena. Based upon 2012 results when including combined estimates for Hudsons based upon the best public information available, the comparison is as follows.
2012 Revenue Cost GP OPER Exp OPER Inc Before Tax After Tax
True Religion(TRLG) 467.29 167.76 299.53 389.17 78.12 78.21 46.7
JOEZ 118.64 62.47 56.17 107.92 10.72 10.34 5.57
HUDSON(estimated) 90.53 35.57 54.96 76.8 13.73 13.5 7.97
Combined 209.17 98.04 111.13 184.72 24.45 23.84 13.54
Comparative % 44.76% 58.44% 37.10% 47.47% 31.30% 30.48% 28.99%
TRLG Stock Price $31.88
JOEZ Comparative Stock $12.69
While it may take 3-6 months to start realizing gains while the acquisition is ironed out, it looks as if JOEZ has legitimate potential to eclipse the $10 mark over the longer term(IE 3 years) with a 1 year target @ $3.75 in my own opinion. I've also calculated an estimated BV after acquistion of $1.16 per share for a current Price/Book of 1.29x compared to the current industry average of 5.23x. Excellent Acquisition....Good luck to investors!
Sentiment: Strong Buy
Looks like seeking alpha used almost your exact numbers..........eerily similar! Wonder if thy pulled them from this message board! LOL....Wouldn't be surprised. Glad to see this message board has tons of insightful posts........for the most part. It's always good to hear different perspectives, whether positive or negative. Keep it up and GL to all!!
I agree the combined companies should be able to generate some synergistic earnings. Cost savings, new markets and revenue opportunities for each looks pretty good to me. The "miss" this quarter was trivial at best, certainly nothing worth a 25% haircut. The idiot analysts are falling all over themselves to say nothing worthwhile and the sheep are bailing out because they can't see the real story and get scared out of their shares. Of course the market makers are hard at work trying to get the price lower - probably a lot of margin calls going on as well with the big drop plus being under $2 again. Longer term should be some excellent upside. Patience will pay off here.
This comparison is absurd. True Religion's has in excess of $8.50 per share and no intangible assets on their balance sheet. You would have to find a way to compensate for these differences before any comparison could be made and there are too many variables with Hudson.
Uh-boy, where do I begin...
Ah, how 'bout the short version...despite higher and higher revenues, the Company continues to not put any more to the bottom line, even with the smoke and mirrors trick from Q1, which should have naturally added (ADDED!!) ~$.01 for Q2. Continued failure of the retail strategy!
Now, the Company has bought themselves some revenue and presumed net income. Since there's nothing public about Hudson, based on Joe's track record, they overpaid. I can't say for sure, but I'm highly confident.
And they now have not only the fixed obligation debt of the Dahan earn-out payments, but now they have some measure of note debt servicing (expense and payment) eating into the newly-combined income.
And then I disagree with your comparatives on many levels. But time will tell.
It is likely that this deal has been in the works for some time and may have factored somewhat into the 2nd quarter shortfall, however I think it was more a factor of optimistic projections and market manipulation. $0.02 per share would have been a more realistic projection given the companies historical performance, especially in the second quarter.
"Presumed" net income is real as EBITDA of approximately $15MM has been publicly noted for Hudson. Also, I came up with annual debt service requirements on the newly acquired debt load of approximately $5,750M which were added to Hudsons estimated operating expenses in the prior post.
As far as comparatives go, there should not be much disagreement as it is black and white math outside of the Hudson projections. However, I'm sure you are aware that the market does not always agree with the math. Stock manipulation is as prevalent today as ever and this stock is particularly susceptible to the type of investors who "ride the wave".
I agree that time will tell!
This will likely be reiterated once Hudsons financials are released. The major synergy coming from this acquisition will be "cost" savings. If you noticed from my analysis above, cost had the highest comparative %. Going forward, this area will likely see the largest benefit from the merge as the combined companies leverage off of each other. Once this transaction is fully implemented, I would expect quarterly EPS estimates close to $0.06 per share in 2014.