Zale: Big Run-Up, Still Room to Move
Zale (ZLC) is up over 300% in the last month. The middle-of-the-road jeweler was basically left for dead in the wake of the last six months of the savage bear market. It's the ultimate retail accessory in this meat-and-potatoes environment we're now living in. Lease obligations and almost $400 million in debt also hang over the company.
Yet, some stabilizing signals from their competitor Signet (SIG) a few weeks ago have lit a fire under the stock, taking it from its 52-week low of 89 cents to $4.65 today. Even with that run-up, the stock is still down 73% for the last six months -- nowhere near the selloff for Tiffany's (TIF) and Signet.
Given that, plus recent insider purchases and still $80 million in cash on the balance sheet, expect Zale to keep chugging higher as the market realizes that bankruptcy is off the table.
Originally published in RealMoney.com on 4/16/2009 11:56 AM EDT
