Thursday, June 27, 2013

Earnings and a buyback

Here's the latest news about 2 stocks I've started covering.

The Finish Line (FINL)

In my article on Seeking Alpha, I expressed the opinion that the first half of this year was likely to be a disappointment to investors.  The stock closed today at $21.20, roughly even with the price on the day I first wrote about it.  My expectation has been, and continues to be, that results will disappoint investors in the near term, but towards the end of the year, I think the Macy's (M) deal will begin to show positive results.  At this point, I'm not sure whether that disappointment is already priced into the stock, and it's true, there might even be a positive surprise when the company announces.  After all, Nike (NKE) posted strong results, which could bode well for FINL.  Until I see the results, I still have a 12 month price target of about $23.30.  That could change, depending on earnings.

Trans World Entertainment (TWMC)

When I wrote about TWMC, I estimated the shares to be worth about $7 and the stock was trading at around $4.70.  The company has a pile of cash, and I believe will likely generate more despite (or more correctly because of) declining sales, and I expected that the company would return some of that cash to investors.  Today, TWMC announced a tender offer for $25 million worth of common stock at a price between $4.50 and $5.10 in a modified dutch auction.  TWMC closed at $5, up about 6% since I first wrote about it.

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