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  • JCG--sell ahead of earnings (May28 after the bell) 0 comments
    May 27, 2009 5:55 PM | about stocks: JCG

    On May 26, I wagered JCG earnings will not justify the vol boost.

    JCREW (JCG): closed $19.89. average volume, 2.7 million shares.

    Sell-short the stock ahead of earnings, Thursday May28 after the close (4:30pm eastern).
    Earnings estimate is $0.11/share, a sharp $(-0.36) lower than last years Actual earnings number.

    Michelle Obama loves JCREW twinsets and smart tailored skirts--clearly a champion for THAT merchandise mix. Mrs. President, you look snappy.
    However, she is NOT seen wearing the other 98% of the JCREW merchandise assortment.

    Open question to Mickey D(rexler): Who's the champion for all that skinny pant, square-top (no breasts)and junk jewelry assortment?

    While I am waiting for Mr.JCREW to comment, my answer: NOBODY.
    Need proof? Just visit a local JCREW store--racks and racks of horrible clothes, marked down 3 times, plus an additional in store 30% off--and still no one at the register buying.
    The website—even worse, crowded and disorganized.

    Bottomline: even if you put poop in a bag, and mark-it down to $15.99, it’s still poop. With so much poop, JCREW should open a garden nursery.

    TRADE: go short in front of Earnings. Expiration is 18 trade days out. Pocket the cash, and hit the beach. Bikini optional.

    JCG stock closed  $19.89 (May 26):
    Calls
    --Jun 25c $0.25
    --Jun22.5c $0.70
    --Jun 20c (at-the-money) $1.60
    --Jun 17.50c (in-the-money) $3.10
    Puts
    --Jun 20p $1.80 (at-the-money)
    --Jun 17.50c $0.80
    --Jun 15c $0.25

    Need color? Check in tomorrow for a good-look book of JCG historical earnings analysis.

     

    ***DISCLOSURE: short JCG***

    Stocks: JCG
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