Wednesday, October 7, 2009

Interesting Comments on LIZ

Options Edge from Schaffer Research put this out about the jump in Liz Claiborne (LIZ) today. I'd place some stock in the Mexx sale, but selling a prime brand like Juicy seems unlikely. Assuming they could get a good deal, reducing the debt would be ideal. Stock prices is still too low for the assets they own.


Liz Claiborne, Inc.

Liz Claiborne, Inc. (LIZ: View sentiment for LIZsentiment, chart, options) rallied 8.6% on Tuesday as speculation swirled that the company is preparing to sell one of its brands. The apparel issue is struggling under a $718 million debt load, and the sale could help ease LIZ's burden. The company declined to comment to Dow Jones, but analyst Brian Sozzi of Wall Street Strategies said that such a move could help assuage investors' anxiety.

"I continue to believe Mexx, with its new brand president having considerable retail experience and exposure internationally, would be first on the block," commented Sozzi, adding that Juicy Couture would be another likely candidate.

LIZ is on the upswing again this morning, with the stock preparing to challenge the $5 level -- the site of its descending 10-day moving average.

Meanwhile, call volume has been heavy on LIZ in recent weeks. The stock sports a 10-day International Securities Exchange (ISE) call/put volume ratio of 20.62, which ranks higher than nearly 82% of other such readings taken during the past year. With a hefty 12.7% of the security's float sold short, some of these calls might have been purchased as hedges.

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