Off The Charts: J. Crew Group Inc. (NYSE:JCG)
For the “Off The Charts” segment, Cramer went up against his colleague at TheStreet.com L.A. Little over the chart of J. Crew Group Inc. (NYSE:JGC). The stock is up a huge 397% since Cramer last recommended the shares on Dec. 1, 2008. Little sees problems with the chart for JCG, noting the stock’s rally off its lows has not been on increasing volume. Little thinks the stock could run from $44 to $50, but the chart also suggests there might be a longer-term pullback in the future for JCG. When evaluating the weekly chart, Little pointed out the stock has seen volume spikes at every rally. He said JCG could pullback to $38 before making a move towards $50. “So while investors could buy the stock here based on that eventual $50 price target, it probably makes more sense to wait for a pullback,” Cramer said. Turning to the fundamentals, Cramer mentioned that J. Crew’s success is due to the great job done by CEO Mikey Drexler of turning the company around. The firm recently reported a blowout quarter, with same-store sales up 8% and inventory down by 10% versus last year. Another big positive for J. Crew is all of the big press the company has received when the First Family was photographed wearing their clothing. Drexler has developed successful spin-offs like Old Navy and Banana Republic for Gap Inc. (NYSE:GPS) when he ran that company, and for J. Crew with their Crewcuts for kids and Madewell for woman. “J.Crew has become a fashion leader, something that’s hard to put a price tag on,” Cramer said. He agreed with Little that J. Crew is a buy, but probably at lower levels like around $38 a share. Cramer told viewers to buy the stock in stages, like half a position now and the rest on any pullbacks. Get the scoop on tomorrow’s hottest trade ideas – TODAY! BeaconEquity.com PREMIER PICKS have an amazing track record. Join this select group and ride the profit wave!
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