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5 Hottest Apparel Stocks So Far in 2013

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Pacific Sunwear

pacsun185YTD Return: +140%

Well, apparently you don’t have to actually turn a profit to make investors want to try you on. Teen retailer Pacific Sunwear (PSUN) has booked eye-popping gains of 140% since 2013 kicked off … despite the fact that it has been losing money for almost seven years.

So what gives? Is surf- and skate-inspired apparel suddenly the next big thing?

Not necessarily … and many shoppers may actually be getting their dose of action-sport fashion from rivals like Zumiez (ZUMZ). Still, investors seem to think things can’t get any worse at Pac Sun — especially considering relatively promising signs like an smaller-than-expected loss and higher-than-expected sales in the most recent quarter.

Then again, you also have to take these outsized gains in such a volatile stock with a grain of salt. PacSun’s 2011 announcement of a plan to shutter 200 underperfoming stores sent the stock up 47% in one day of after-hours trading — from $1.35 to $1.99.

And even after its recent huge run, Pacific Sunwear stock still trades at a huge discount to its $28 high back in 2005. Today’s current pricetag? Under $4.

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

Article printed from InvestorPlace Media,

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