I will get to a recap after I finish the post.
Short Sale of the Day: Hibbett Sports Inc.
Analysis: For some reason, I cannot recommend a Buy Pick. Nothing meets my criteria because it is all way too overvalued. I want to be bullish. I want to blindly recommend some ETF or stock, but I just cannot. The market will most likely rise today, but I think it is going to be pretty neutral throughout the day. If the Michigan Consumer Sentiment Index comes in worse, it will really hurt things. And the question keeps ringing in my head…can we go any higher?
Instead, I went with what I think is a bit safer. We have a typical Oxen Short Sale on our hands, as we are looking for a stock that is getting a bit too much ahead of itself. Hibbett Sports Inc. is one of these companies that might be a bit too much ahead of itself. The stock is opening with over 6% in gains already today. This is a stock with low volume and average beta. This type of move is a large move for it. It is very similar to the Short Sale we had on Wednesday with Harbin Electric, a company that gained big going into earnings, gained big after earnings, and had a pop to start the day. Yet, we saw it drop 12% from its high.
Hibbett is most likely going to continue to rise due to the market conditions and the fact that it beat earnings. The company reported an EPS of 0.40 vs. the expected 0.31. That gain is pretty large for a company that has seen very mild growth over the past couple years. Yet, the company, which is based in Birmingham, AL, saw short-term growth due to victorys by the New Orleans Saints and Alabama Crimson Tide this year. A smart investor won’t bank on sports teams to get similar profits. In fact, the company will probably get an overestimation into the future.
Hibbett is going to see a lot of selling interest as buying interest dies out throughout the day. It will get a pop and stay neutral and die out from there. Get in at a smart entry when we see the stock topping out, which is where I think I have set my range. Hibbett’s technicals are too attractive for a short sale. The stock is up over 10%…