SMBL has only nine analysts covering it and of them seven have buys and two have holds. To put SMBL into context, WFM trades at 47x TTM, TFM @ 39x TTM, and UNFI @26x TTM (UNFI recently regained its 200-day moving average). It is also important to put this SMBL rally into prospective too, for SMBL was a $6.00 stock a mere 130 trading days ago.

RBC is quite bullish on SMBL, for it was on their ‘top picks’ list and they have a $16.00 price target. RBC notes that SMBL has jumped on the gluten free and plant based packaging train. These two trends represent strong growth areas. According to the firm, “SMBL is on the cusp of being a beat-and-raise story for the first time in its history as a public company.”

SMBL distributes through many channels, for example WFM. UNFI, the cheaper multiple stock, on the other hand, has “several operating divisions aggregated under the wholesale segment, which is the company’s only reportable segment (meaning the other segments are not material – not quantitatively large enough- to report them individually). These operating divisions have similar products, services, customer channels, distribution methods, and historical margins,” according to the UNFI 10-Q.  Basically, the wholesale segment distributes natural and organic, specialty foods, produce, and related products to the USA and Canada. “Other” includes a retail division, manufacturing plant (roasted nuts, seeds, dried fruits etc), and corporate expenses account necessary to operate.

 The average price target for SMBL is $14.00, and considering we are trading around $12.50, this may not be a very good risk-reward trade. SMBL, along with stocks like ABT, should be on one’s watch list if/when we call off the cliff.

Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…

Author

 salernoma@mx.lakeforest.edu

According to URBNs report, direct-to-consumer net sales as a percentage of consolidated net sales for all brands combined increased by 2.4% to approximately 21.8% of consolidated net sales for the nine months ended October 31, 2012.  This number shows an increase from 19.4% for the comparable period in fiscal 2012.  The holiday season is expected to be one of the major contributors to the better than expected 4^th quarter sales, said URBN CEO Richard Hayne.  The report also pointed to strong black Friday sales as a contributor.

Plans to expand the brand were also detailed in URBNs regulatory report.  URBN’s line of retail stores consists of Urban Outfitters, Anthropology, Free People, Terrain, and BHLDN.  The report stated that URBN plans to open approximately 49 new stores during the fiscal 2013, including 18 Urban Outfitters stores, 14 Anthropology stores, 15 Free People stores, 1 Terrain store, and 1 BHLDN store.

Author: Tyler Sciortino

Current Student at Roosevelt University, Majoring in Finance.

Contact for questions or inquiries at tsciortino@mail.roosevelt.edu

Paper sold 3700 VALE Dec 18-19 Call Spread for $.33 (2.1 times usual volume) when stock was trading $18.13

Paper bought 2200 SCHW Dec 13 Calls for $.50 (2.1 times usual volume) when stock was trading $13.37

Paper bought 3070 $GPS December weekly 30.5 Puts for $.63 (2.1 times usual volume) when stock was trading $30.49

Paper sold 9861 USB Jan-Dec 32 Put Spread for $.45 when stock was trading $32.10 Paper sold 33,607 MRO Dec 29 Puts for $.31 (5.4 times usual volume) when stock was trading $29.91

All food jokes aside, CMG may present a real trading opportunity here and now. As mentioned before, CMG is currently experiencing a pennant formation, as seen in the chart below. This is essentially a price arrangement that displays a decreasing range as price gravitates toward the center of the narrowing triangle or towards the apex. The apex is where price is expected to break out, and judging by the action on Friday we be headed lower. Friday, 12/7/12, was, according to candlestick analysis, a reversal day. Price started to rally higher, above the high of the past three candles, however it was promptly rejected when it was met with sellers at the 50-day moving average and closed a mere $0.40 above where it opened. The 50-day moving average has not been a great indicator however. The last two times CMG came into contact with this line resulted in false support and resistance levels, but it was respected on Friday. If Friday’s action is any indicator, which many folks will argue that it indeed is, the larger intermediate term trend may result lower…or more specifically…the pennant breaking lower. Other restaurant stocks have seen some tough times too, but of the 26 analysts that cover CMG, most have holds or overweight ratings…so expectations have room to go lower. They expect $2.09 for Q4 2012, which is about 30 trading days away.

e-mail any comments, feedback, suggestions, or general inquiries to:

Author salernoma@mx.lakeforest.edu