Out Fox The $treet

Interesting movement today in Liz Claiborne (LIZ). The company is still struggling to right size its business structure and return to a profitable company. The stock is up over 5% today around the $7.65 area which is close to the recent highs of $7.79 intraday and a closing high of $7.61 just on December 6th. A close at these levels and any follow through tomorrow could signal much higher prices. Not sure what the market is telling us other then the retail environment has been strong this holiday season. Interesting though is that Jones Group (JNY) is only up 1% today and its no where near recent highs in Oct around $21 which is much higher then the current sub $16. Maybe LIZ is in play and thats why the stock has been strong. Regardless the stock is possibly set up for a retest of the yearly highs in the $9-9.5 range reached back in late April. LIZ isn't thought to be well run so somebody apparently knows something to aggressively buy LIZ today. Its a cheap company if they can...

More on The Jones Group. The stock likely sold off way too much, but I don't have a comfortable feeling on this sector and we're already invested in Liz Claiborne (LIZ). Amazing that Cramer is always portrayed as the 'Crazy One' but he seems to have a calming effect on some of the stocks he brings onto his show. JNY CEO on Mad Money tonight. As I said earlier, bad companies make excuses. Sure they may have a higher mix of shoes, but they clearly didn't position themselves correctly coming into the Q. Though Wall St tends to over react so don't join them.

The Jones Group (JNY) reported higher costs today causing them to miss earnings estimates by a little over 10%. Consequently the stock has slumped over 20%. Considering the stock trades at a remarkably low 10x estimates the reaction in the market has been harsh. JNY blamed higher commodity costs such as cotton, wages from employees in Asia, and transportation costs from having to ship goods via air which naturally costs a lot more. The first 2 costs should have been built into analysts models and impact most of the industry. The higher transportation costs could very well be a JNY specific issue of not ordering enough inventory early.  The news has caused a huge drop in the stock of Liz Claiborne (LIZ) seen as a major competitor to JNY and other retailers owned in our portfolios including Sears Holdings (SHLD) and Dicks Sporting Goods (DKS).  It's too early to tell whether this is an industry issue or just bad management and modeling with JNY. Yesterday, Coach (COH) repor...