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Zale Corp.: Leave It

Don’t be fooled by the rocks that it’s got; Zale Corp. (NYSE:ZLC) doesn’t have much to offer besides a shiny showcase of jewels.

Zale just can’t turn a profit. It has booked seven straight quarters of revenue growth but hasn’t made money in the past four years. The company’s earnings actually have declined 78% in the past half-decade, and in the most recent quarter, the company posted a loss that was 20 cents — or nearly 30% — worse than analysts were expecting.

You wouldn’t know it by looking at ZLC shares, which have climbed 72% in the past year. Still, at $5 per share, the stock still is well off its pre-crisis levels around $30, and it essentially has traded flat since it took a vicious post-earnings beating in November.

The only good news is that analysts are indeed expecting a profit this quarter when the company reports Feb. 21, but that number has been revised down in the past three months. The shine is fading from this bling.

As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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