True Religion (NASDAQ:TRLG)
One thing certain to be bought during the holidays is blue jeans. This teen staple has evolved to become more and more of a fashion statement. Designer jeans are alive and well, and that should bode well for a company like True Religion.
Note that one of Wal-Mart’s big Black Friday deals is $10 blue jeans. But I wouldn’t be too concerned. As we’ve seen in this economy, there’s a pronounced dichotomy between luxury and discount retailing. So, True Religion’s designer jean sales aren’t likely to slide because of Wal-Mart’s discounts.
On Nov. 2, True Religion announced earnings for the quarter ending Sept. 30 that beat Wall Street estimates. On an adjusted basis, the company made 51 cents per share versus an average estimate of 48 cents. The stock moved higher on the news and is now up 80% over the last 12 months.
For the full year, Wall Street expects True Religion to make $1.19 per share. In the following year, profits are forecast to grow by 18% to $2.33 per share. At current prices, True Religion trades for just 14.5 times next year’s expected earnings.
I would buy the stock in advance of what should be a strong Christmas season for the company.