Simple Stock Watch: Rue21 (RUE)

A lot of people like getting their fashion fix on the cheap. That’s why Ross Stores and TJ Maxx have continued to perform well.

But think about who those stores attract. Families looking for bargains for the whole gang. Or adults, saving money on clothes for themselves.

There’s nothing terribly edgy about either of those companies, even though both stocks have made steady price advances in the past 15 months.

But a recent IPO, Rue21, takes the value clothing concept to a different level. Check out this video from the company’s IPO road show:

Rue 21 Road Show

It gives you a sense of Rue21′s commitment to being fashion forward, at value prices for today’s price-conscious customer.

This stock has a few things going for it right now. First, the retail sector has been red hot. Don’t pay attention to all the mumbo jumbo you hear about people cutting back in the recession. While that’s true in many instances, it most definitely is not true across the board when it comes to retail. Chains that have managed inventory well maintained acceptable pricing structures have seen customers continue to stream through their doors, even during the recession.

Rue21 only went public in November, 2009. You might have noticed that many of the huge stock gainers are fairly recent IPOs. That’s no coincidence. These are new companies with management teams that are still enthusiastic, with a drive to bring fresh ideas to the marketplace.

On March 17, Rue21 said fourth quarter profit grew 89% from the year-earlier period. Sales were up 30%. Perhaps more important, the company guided full-year sales and earnings higher than analyst expectations.

The stock climbed 8% the next day, in above-average trading.

It may be consolidating gains a bit, after that post-earnings breakout. Rue 21 is a stock that absolutely has a place on our watch list right now!

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Tagged as: corporate finance, economics, finance, financial economics, growth investing, initial public offering, investing tips, investment, recent ipo, ross store, ross stores, rue, rue21, stock, stock market, stock tips, tj maxx

The information in this article is provided for informational purposes only and should not be considered direct investment advice.  No guarantee is made that the strategies or securities discussed herein will be profitable. The information provided reflects the views of the author as of a particular time and are subject to change at any time without notice.