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Gaining Attention

Stock (Symbol) Stock Price

Body Central (BODY)

$24

Data is as of Expected to Report Sector

January 4, 2012

Mar 14

Retail & Restaurant

Sharek’s Take
David SharekBody Central (BODY) is starting to get the attention it deserves. This clothing store for young ladies is in tune with what fashonista’s want yet the stock has been unloved by the male-dominated world of institutional investing. These old guys need to get out more often, maybe hit the club on the weekend, get their groove on. Shake that money maker. During the past two months BODY stock has been ticking higher, so someone’s watching.
 
BODY has the numbers to be a winner in 2012. Profits are expected to grow 22% this year and the stock’s P/E is only 16. Furthermore, the details are sharp too: same store sales were up 8% last quarter and margins rose from 5% to 7% since last year. The company is (was) set to open 33 stores in 2011, and it had 226 stores as of last quarter.
One-Year Chart
BODY’s one-year chart shows the stock is about to touch it’s 52-week high. Profit growth has been awesome during last four quarters, but growth’s expected to slow 2QtrsOut.
 
I like the P/E of 16. I think that could go to 25 this year. That would likely mean a move of 50% higher.
Earnings Table
Body Central’s profits jumped 111% last quarter, on an 18% rise in sales.
 
BODY has now beaten the street for three straight quarters. I wish the company would raise and beat though. 

Annual Profit Estimates once again increased slightly. Revenue growth is expected to be 19% in 2012. That combined with increasing profit margins could produce 25% profit growth.
 

Quarterly estimates show profit growth slowing to the teens two quarters from now, but BOSY has been beating the street lately.

Fair Value
With 25% profit growth a distinct possibility, BODY should get a 25 P/E this year. That’s good upside for 2012 and great upside for 2013.
Ten-Year Chart
This stock  just went public on 2010. I think the stock got ahead of itself in the beginning, and then became undervalued.
 
I’ve read through BODY’s financial reports, and am impressed how management runs its business. I think they do the right things and are smart. That being said, the company buys all its clothes from other sources (it doesn’t have its own line like Lululemon or Coach) so there is no barrier to entry.
Power Ranking Bottom Line
Growth Portfolio

6 of 20

Body Central is a solid retailer that needs more love from Wall Street. I think the stock’s recent strength will attract even more eyes.
 
BODY makes a BIG jump in the Power Rankings. In the Growth Portfolio
it jumps from 14th last quarter to 6th this quarter. I like it even more in the Aggresive Growth Portfolio where it ranks 4th out of 10 stocks.
Aggressive Growth Portfolio

4 of 10

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