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Bull of the Day: Buckle (BKE)

Zacks

I tend to pick on individual companies for extended periods of time. Frankly, I can be a bit of a bully. However, I don’t hold a grudge. If a company starts to turn things around, then I am fully capable of changing my mind about it. That’s exactly what’s happening here with today’s Bull of the Day. It’s a stock I made fun of for a long time. It was an easy target though, with estimates falling as quickly as the stock price. But I think it’s beginning to turn the corner here for the better.

Today’s Bull of the Day is retail store operator Buckle (BKE). The Buckle, Inc. operates as a retailer of casual apparel, footwear, and accessories for young men and women in the United States. The company markets a selection of brand name casual apparel, including denims, other casual bottoms, tops, sportswear, outerwear, accessories, and footwear. It operates stores under the Buckle and The Buckle names. The company also sells its products through its Website, buckle.com. As of January 18, 2016, it operated 467 retail stores in 44 states.

I’ve said it a thousand times before, the single most important chart investors can use to analyze their stocks is the Price, Consensus and Surprise chart on Zacks. While price trends can shift on a dime, earnings trends take much longer to develop. As such, they take time to turnaround as well. The good news is, once the ship has been turned back around in the right direction, it tends to stay in that direction.


Looking at that chart on Buckle you can see why I hated on the stock for so long. Estimates continued to plummet and there was little chance of success. Even as these estimates plummeted, I didn’t feel the company was coming to grips with the grim situation. However, note the turnaround in estimates for not only this year but next year’s consensus numbers. This tells me that the bounce the stock has taken off the lows was justified. It wasn’t just a dead cat.

The question will certainly become whether or not the turnaround can continue. Over the last month, our Zacks Consensus Estimate for the current quarter has gone from 65 cents to 72 cents. That move is helping to push up the current year number from $1.60 to $1.70. There’s still contraction on the table for next year as analysts are only looking for $1.40. However, it’s important to note that they were looking for $1.22 a month ago. The bullish uptick in these numbers tells me that there could be a bullish end it sight. It’s going to take a little bit of patience but investors may be rewarded.

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