Good Tuesday Morning?

Written by GSCR Staff   
Tuesday, 04 September 2012 10:54

Tuesday Morning (NASDAQ – TUES - $5.50), a leading closeout retailer with over 850 stores in the U.S. specializing in selling deeply discounted, upscale home furnishings, housewares, gifts and related items, has been on a tear since its CEO was fired 3 months ago.

The Company announced a new CEO today who has over 35 years of C-level experience with major players in the space. What has caught our attention is the fact that the stock is significantly above its 200-day and 50-day moving averages, as it has routinely hit new highs of late.  The public float is very small, given that the stock is a favorite of institutions that own over 75% of it.  Volume is steady and the stock is under accumulation.

EPS expectations for the June 2013 year call for $0.23 and $0.32 next year.  The valuation is getting pricey but we believe it can reach the $6.40 level, which is a 16% rise from current levels.  Buying on dips is a great idea but if it falls below its 50-day moving average of $5.20, we would be sellers.  

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