At the end of 2011, we alerted on the penny stock of American Apparel, Inc. (NYSE AMEX: APP) at 0.53 and watched it more than triple. We alerted on Quiksilver, Inc. (NYSE: ZQK) last summer and watched it nearly triple to $8.14. With yesterday’s volume surge and last month’s plethora of Form 4 filings, is the Nasdaq listed penny stock of dELiA*s, Inc. (DLIA) the next apparel company that could see better than 250% gains in the next 12 months? Setting a new 52 week high on Tuesday, it’s hard not to think that DLIA stock is headed in the same direction as APP stock and ZQK stock went – up the double me or better highway.
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DLIA Stock Quote
Market Cap: 53.22M
Tuesday Close: 1.69 ▲+0.23 (+15.75%)
Issued and Outstanding: 32,789,615
14-Day Rel Strength: 83.42%
1st Resistance Point: 1.8533
2nd Resistance Point: 2.0067
1st Support Level: 1.5233
2nd Support Level: 1.3467
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dELiA*s has been a smoking hot penny stock on the Nasdaq since bottoming out for at 0.63, the 52 Week Low set back on April 30. Gaining 168.25% already after closing at $1.69 yesterday, the $1.06 jump in price may still not be enough for this apparel retailer when considering how other retailers we have covered did in a stressed economy.
The multi-channel retail company primarily marketing to teenage girls recently added Whitney Randall to the management team at dELiA*s. Occupying the role of Vice President and General Merchandise Manager, Ms. Randall comes with a great resume behind her having had successful tenures with the Company’s CEO, Tracy Gardner, at both The Gap and J.Crew. For the past year, Randall wasn’t sitting on a beach sipping mimosas, she was instead working as the Divisional Vice President of Global Merchandising for Coach.
The addition of a friendly face to work along side Gardner should bring huge upside for the already booming niche-market apparel company. Considering that dELiA*s wholly-owned subsidiary, Alloy Merchandise, LLC, was just sold to HRSH Acquisitions LLC for $3.7 million in cash and a reduction of $3.1 million in liabilities, which HRSH assumed, things are really shaping up in terms of their balance sheet.
For the 13 weeks ended May 4, 2013, dELiA*s reported having $3.643 million in cash and inventory worth $26.119 million. Sales for the period were lower than the same period the year prior, $35.177 million versus $41.214 million, however bullish sentiment is surrounding DLIA stock as insiders have been buying up shares on the cheap and filing Form 4’s to report it.
dELiA*s reported that, for the combined May and June period, total Company revenue decreased -15.1% to $23.2 million compared to the same period in fiscal 2012 reflecting persistent weak traffic trends. Sales from their retail segment decreased -12.2% to $16.9 million, due to a reduction in store count and a comparable store sales decrease of -8.1%. Sales from the company’s direct segment also decreased, by -22.2%, to $6.2 million.
Despite the lower sales thus far in 2013 and with just 2 weeks left before the Annual Meeting which is to be held at the offices of Troutman Sanders LLP, The Chrysler Building, 405 Lexington Avenue, New York, New York at 9:00 a.m. Tuesday, August 6, 2013, going in on a high note will certainly bring about an optimistic ear for those wanting to know how the team of Randall and Gardner plan to take dELia*s to a whole new level.
For now, DLIA stock remains on watch and could have a spectacular summer should it break past $2 – a level not tested since early 2011.
About DLIA Stock
dELiA*s, Inc. is a multi-channel retailer of apparel, accessories and footwear, primarily marketing to teenage girls.
Click here to view the SEC filings for DLIA.
Click here to view the website for dELiA*s.
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A strong 2nd half of 2013 is what DLIA needs to continue to be a breakout penny stock. Considering that sales were $222.699 million, $217.152 million, $220.697 million, $223.866 million and $215.620 million for the fiscal years ended 2012 – 2008, the company looks to be on pace to have a hard time breaking $200 million for fiscal 2013. Betting on the underdog with the dynamic duo team of CEO and VP, we like the chances DLIA stock has moving forward.
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