The site where students compete, learn, and make money Wednesday, October 8, 2008
DJIA: -189.01 NASD: -14.55 10-YR: 0.209
 
 
 
 
     
 
     

A Short For Polo Ralph Lauren Corporation (NYSE: RL)?

Submitted by lucas20 on Thu, 02/07/2008 - 13:40.

It may be wise to find an opportunity to short Polo Ralph Lauren (NYSE: RL), or sell some call options for March. This may be a good time to write some covered calls if you own RL stock.

The company just reported its 3Q operating earnings of $0.94, well above consensus EPS of $0.77. Its American Living division drove earnings higher. Management outlook seemed significantly tempered, noted a slow December. Most see 2007 to remain within consensus estimates, despite the significant upside surprise, because of the expected weak 4Q.

The stock is already 3% off its near 10% gain yesterday. I believe it will be trading at pre-earnings levels within the month. This isn't a case of the stock getting killed over the past three months either. It is only down a mere 4.73%, compared to 11% for PVH and 23.26% for LIZ.

I will put my money where my mouth is on this one (sort of) and place a stock forecast to that point on the site.


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