Blue jeans are red hot, and consumers are still finding enough nickels and dimes to buy the best brands.
One such brand is Joe’s Jeans Inc. (JOEZ). In fact, people are paying top dollar for denim, and the brands being purchased are also some of the hottest stocks on the Street.
For example, popular denim retailer, The Buckle (BKE), has a market capitalization in excess of $1 billion. In stark contrast, JOEZ has a market cap of less than $50 million. So if JOEZ gets hot, the upside is enormous.
JOEZ rocketed higher on the strength of a positive third-quarter earnings report. Shares were previously bouncing between 60 cents and 80 cents per share. The earnings report pushed shares well above its range to over $1 per share.
Highlights from the report include a sales increase of 16% and steady gross margins at 49%. JOEZ earned 3 cents per share in the period.
The turnaround for JOEZ is just beginning, and that turnaround is coinciding with improvements in economic activity. Those that bought Joe’s are up 64% since I recommended the stock in July. And there are more gains to come. Currently trading around $1.70, I see the stock going to $5 per share in a 12- to 24-month period.