Joe’s Jeans, Inc (NASDAQ: JOEZ) Q4 2010 Analysis

Recent price: 1.63$

P/E Ratio: 4.52

3 month Target Price: 2.43$

Company Description

Joe's Jeans Inc. ("Joe's") designs, sources and distributes its Joe's® and Joe's Jeans™ branded apparel products to over 1,200 retail doors in the U.S. and abroad. With its competitive advantages and industry expertise in denim-wear and denim-related products, Joe's produces one of the most recognized and sought-after premium denim brands in the world. Joe's products are designed internally and sourced to specification from suppliers primarily located in the U.S., Mexico and Morocco. Finished goods are then distributed directly to Joe's customers from its distribution center in Los Angeles. Joe's maintains third party showrooms in New York and Los Angeles to showcase its Joe's® and Joe's Jeans™ products for its customers. Joe's has recently has opened a branch office in Paris to distribute its products in Europe.

Confidence Margins

Strong resistance  $3.60 (+121%)

Light resistance  $2.43 (+49%)

Light support  $1.50 (-8%)

Strong support  $1.10 (-33%)

Recommendation

Because of poor quarterly results, JOEZ has been punished by its investors in the means of a huge oversell. The RSI just got over the oversold position and the MACD has bottomed. It is the right time to buy for the coming quarter.

Entry strategy

For the cautious investor:

Buy the stock for 1.70$ or less.

For the risk-taking trader:

Since there are no option contracts for this stock, the suggested strategy is to use your margin to leverage the position of the cautious investor.

There needs to be a close attention paid to this position. It has a great potential profit, but the downside is still pretty high.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 2.40$, or keep it until 3.00$ if you are very bullish.

For the risk-taking trader:

Same as the cautious investor. However, one needs to keep an eye on the position to make sure not to incur large losses should the position turn sour.

Oclaro, Inc (NASDAQ: OCLR) Q4 2010 Analysis

Recent price: 8.62$

P/E Ratio: 51.81

3 month Target Price: 19.07$

Company Description

Oclaro, with headquarters in San Jose, California, is a Tier 1 provider of innovative optical and laser components and solutions for a broad range of diverse markets, including telecommunications, industrial, consumer electronics, medical and scientific applications. The company is on a mission to be a predominant force in the optical industry, and has been making bold moves to establish a leadership position in each of the markets it serves, expand its addressable market, and increase its share of existing markets.

Confidence Margins

Strong resistance $15.99 (+85%)

Light resistance $14.12 (+64%)

Light support $8.00 (-7%)

Strong support $6.10 (-29%)

Recommendation

This is a company that has been punished by its investors. This will prove to be a very profitable trade because it has already seen much of the downside after its earnings release.

Entry strategy

For the cautious investor:

Buy the stock for 8.70$ or less.

For the risk-taking trader:

Buy the 17.50$ January 2011 out of the money call options for about 10$ a contract.

This position will require the investor to keep an eye on his portfolio to make sure he doesn’t endure any unplanned losses. The support levels imply a mild possibility for the stock to reach them.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 14$, or keep it until about 16$ if you are very bullish.

For the risk-taking trader:

These options are currently undervalued because investors assume that there should not be much movement upwards for this stock. Sell them if the stock reaches the same levels as in the case of the cautious investor.

Kulicke & Soffa Industries Inc. (NASDQA: KLIC) Q4 2010 Analysis

Recent price: 7.33$

P/E Ratio: -

3 month Target Price: 8.20$

Company Description

Kulicke & Soffa Industries is a global leader in the design and manufacture of semiconductor assembly equipment. As one of the pioneers of the industry, K&S has provided customers with market leading packaging solutions for decades. In recent years K&S has expanded its product offerings through strategic acquisitions, adding die bonding, wedge bonding and a broader range of expendable tools to its core ball bonding products. Combined with its extensive expertise in process technology, K&S is well positioned to help customers meet the challenges of assembling the next-generation semiconductor devices

Confidence Margins

Strong resistance $8.21 (+12%)

Light resistance $7.50 (+2%)

Light support $6.65 (-9%)

Strong support $6.00 (-18%)

Recommendation

This is a very speculative trade because the company has experienced losses over the last year. The company should however be able to surprise analysts. However, due to improving economic conditions, this trade could be very profitable.

Entry strategy

For the cautious investor:

Buy the stock for 7.33$ or less.

For the risk-taking trader:

Buy 8$ December out of the money call options for about 10$ a contract.

Because of the speculative aspect of this trade, try to keep the supports on watch if you feel uncomfortable with a potential downward movement.

Watch the stock closely as the earning release date approaches. If the resulting price is satisfying, sell the call options as an up price movement happens.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 8.20$, or keep it until about 9.00$ if you are very bullish.

For the risk-taking trader:

These options are currently undervalued and their prices anticipate a negative earnings report from the company and they should greatly appreciate following a positive move of the stock.