Stone Fox Capital's  Instablog

Apparently at the ICR XCHANGE conference today, CEO presented some bullish 2012 comps news on the 3 brands. See below. He also reiterated that the majority of any decline in EBITDA expectations were due to a reduction in the expected cost cuts reached in 2012.

kate spade: 10%+
Lucky Brands: 10%
Juicy Couture: 5%

Anybody following LIZ should browse through the presentation on the website. It provides some good summaries and expectations for the global expansion of the 3 brands.

LIZ is almost like a biotech firm with 3 promising drugs that just got FDA approval. That's the feeling one gets when reading about these brands potential and how they were all held back with the restructuring in LIZ over the last 3-4 years.

Each brand has the potential for over $1B in annual sales with kate spade expected to be a multi billion brand. If that seems lofty, just note that Coach (COH) is expected to hit $4.7B in sales this year.

One should consider that Coach (COH) trades at a multiple of over 4x sales. LIZ has a multiple of only .5x sales. As kate spade and Lucky Brands keep popping out those double digit comp gains, look for a shift in the multiple to something greater than 1x.

The stock has already responded recently hitting 52 week highs, but the story is still in its infancy. LIZ or FNP in May is now a growth story where the focus on comp sales and new stores will be the norm. This could and should lead to dramatically higher prices. LIZ trades at very low multiples considering the franchise brand had 58% comps in Q4. Heck even Lucky Brand had 20% comps.

Now with the expectation that 2012 will be the inflection point with Juicy Couture and LIZ will become a major growth story.

Disclosure: I am long LIZ.

While already known that KRYSTEXXA would get the permanent code on January 1st, confirmation is always good. Saivent Pharma (SVNT) had a horrible 2011 due to slow sales from this new drug approved for treatment for refractory chronic gout (RCG).

The J code will undoubtedly help. By all accounts, the new drug works and the only issue has been working out the reimbursement process. Considering the time it takes to work through the system, SVNT doesn't expect a major impact until Q2.

At just $2.4 and with a market cap around $170M, SVNT has become an extremely cheap stock if this J code solves all the issues with sales. It seems bizarre that this would solve the problems, but it is an expensive drug.

Via SVNT PR:

• product-specific billing code, or permanent J-code, for KRYSTEXXA® (pegloticase) became available on January 1, 2012 . The new J-code, J2507, was assigned by the Centers for Medicare and Medicaid Services (CMS) and will help simplify the billing and reimbursement process for prescribers of KRYSTEXXA, the first and only U.S. Food and Drug Administration (FDA) approved treatment for refractory chronic gout (RCG).
• "The availability of a permanent J-code for KRYSTEXXA is a significant step toward ensuring that healthcare providers and their patients with severe and debilitating gout, or RCG, have access to the first and only product for RCG," said John H. Johnson , Chief Executive Officer and President of Savient Pharmaceuticals.

Remember this stock was over $11 back in April.