High-Growth Textile Stock Breaking Out – Buy Now

by Sam Collins | November 1, 2013 1:55 am

Unifi (UFI[1]) — This producer of multi-filament polyester and nylon yarns with enhanced performance characteristics was first mentioned by the Trade of the Day on Feb. 25[2], at just over $15, and again as one of our Top Stocks to Buy for May[3] at around $19.

It was noted in the May report that Benzinga named it one of the highest-growth textile company listed on the NYSE. It uses recycled products to produce REPREVE winter sportswear for companies like Patagonia, The North Face and Polartec, and plans to provide products for the Winter X Games 2013 Aspen.

On Oct. 23, the company announced preliminary operating results for fiscal Q1 2014. Net income increased to $0.46 per share, up from $0.11 from a year ago. UFI used $5.8 million of excess cash flow from operations to repurchase 249,000 shares of the company’s stock. Analysts’ consensus earnings estimate for fiscal 2014, ended in June, is $0.94 per share and $1.20 for fiscal 2015. Insiders have been on-balance buyers of the stock for the past 12 months and the past three months, according to E-Trade.

The stock broke from a bullish “W” formation on June 1, and began a consolidation from $22 to $24 that ended Thursday with a breakout to a new high at $24.64. The breakout renders a new target of $27-plus.

UFI Chart
Click to Enlarge
 Chart Key[4]

Disclosure: Sam Collins owns shares of UFI.

  1. UFI: http://studio-5.financialcontent.com/investplace/quote?Symbol=UFI
  2. on Feb. 25: http://investorplace.com/2013/02/trade-of-the-day-unifi-inc-nyse-ufi/
  3. Top Stocks to Buy for May: http://investorplace.com/2013/04/top-stocks-to-buy-clmt-cern-hig-ilmn-ufi-yhoo/view-all/
  4. [Image]: http://investorplace.com/wp-content/uploads/2013/05/chart-key.gif

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