Gordmans Stores: Zacks’ Bull of the Day Play

Gordmans Stores (GMANSnapshot Report) is a Zacks Rank #1 (Strong Buy) and is a chain of discount retail department stores. I decided the best way to show how big this small company is was to show the geographic footprint. This chart was presented at a recent investor conference:

Description

As noted above, GMAN is a chain of discount retail department stores. As of May 21, 2015, the company operated 99 stores in 22 states. Gordmans Stores, Inc. was founded in 1915 and is headquartered in Omaha, Nebraska.

Earnings History

GMAN has posted a couple of good quarters, with back to back beats of the Zacks Consensus Estimate. The January 2015 quarter saw the company post earnings of $0.12 when the estimate was looking for $0.07. That five cent beat was good for a positive earnings surprise of 71%. The next quarter was even better.

The April 2015 quarter that was reported on May 21, was looking for a loss of $0.03 but the company reported a gain of $0.02. That is a huge swing, and it translates into a positive earnings surprise of 166%.

Earnings Estimates

The Zacks Consensuses Estimate for 2015 started the year as a loss of $0.12 and moved higher to a loss of $0.06 the next month. The estimate moved higher by a penny in both April and May and that left us at a loss of $0.04 which is where the number stands today.

2016 only has had estimates for a few months. The Zacks Consensus Estimate for 2016 debuted at $0.06 in March. By May the number increased 33% to $0.08. So the move from a loss of $0.04 to a gain of $0.08 is approaching 300%.

Customers

I wanted to give a deeper look at GMAN from a recent investor presentation. The company noted that this was their core customer:

The product mix seems to fit in well with the core customer. The company breaks down sales as coming 31% from Women/Juniors, 26% from Home Décor and Essentials and then 15% from Accessories and Fragrances. That is 72% of sales coming mostly from items that the core customer is looking for.

A Domestic Play

One of the reasons I am going with GMAN is that it is insulated from most of the Greek / Puerto Rico and other international issues. Their stores are mostly in the center of the US, and retail has been a decent hiding spot of late.

Chart

Zacks has developed a chart that helps investors see how earnings estimates have impacted the price of the stock over the last several years. We call this chart the price and consensus chart, and each color coded lines represents analyst estimates over a designated year. As estimates increase, the stock tends to follow. The Zacks Rank is impacted by earnings estimate increases, beats and incorporates the idea of analyst agreement and magnitude. As a Zacks Rank #1 (Strong Buy) we see that estimates are moving higher.

Follow Brian Bolan on twitter at @BBolan1

Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Home Run Investor service, a Buy and Hold service where he recommends the stocks in the portfolio.

He also run the new Stocks Under $10 Investor service where he looks for low priced stocks that are seeing positive earnings estimate revisions. This popular service has seen some strong early returns and offers a free trial via the Zacks Investor Collection program that includes Home Run Investor, Value Investor and Income Plus.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s