JOEZ: Strong Retailer with Growing Earnings

Joe's Jeans is a high quality apparel company that primarily targets upscale markets, and is becoming increasingly fashionable among various celebrities, including Will Smith, Tom Cruise, Hilary Duff, and Kate Beckinsale. (www.joesjeans.com) Also, here in southern California, they are becoming increasingly popular among women ages 16-20. Earnings have increased about 14.4% over the last five years, and 123.7% over the past year alone. Furthermore, JOEZ balance sheet is very strong, with no outstanding share dilution in the past two years and a steadily increasing cash reserve. They have also steadily reduced long term debt from $11 million to nothing. Best of all, this stock is extremely undervalued, with a PEG of only 0.7, and a price to earnings ratio of 14.2, compared to the apparel industry's average PEG of 1.2 and P/E of 19.8. While short term prospects will most definitely be volatile, I would pick this stock for the long haul.