Can Coldwater Creek Stay Hot in 2013?
As 2013 begins, now's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.
Today, I'll look at Coldwater Creek (NAS: CWTR) . The women's retailer rebounded sharply from mid-year lows in 2012 to post a gain for the year, making some believe that the long-awaited turnaround for the company may finally be at hand. Below, you'll learn more about Coldwater Creek's prospects for 2013.
Stats on Coldwater Creek
Average Stock Target Price
Fiscal 2013 EPS Estimate
Fiscal 2014 EPS Estimate
Fiscal 2013 Sales Growth Estimate
Fiscal 2014 Sales Growth Estimate
Source: Yahoo Finance. NM = not meaningful due to negative earnings projections.
Will Coldwater Creek keep the good times going in 2013?
Analysts paint a confusing picture of Coldwater Creek's future. On one hand, their target price represents a gain of more than 50% from the stock's current level. Yet they also see losses both this year and next, and they expect only sluggish revenue gains after a contraction in sales during the soon-to-end 2013 fiscal year.
Perhaps the biggest sign that Coldwater Creek is turning over a new leaf is the departure of former CEO and Co-founder Dennis Pence, who announced in the company's most recent quarterly report that he would hand over the reins to Jill Brown Dean. Pence will remain chairman until the end of 2013, but given Pence's roughly 18% stake in Coldwater Creek, it's still unfortunate to see a change in leadership that involves a founding member of the company jumping ship.
The big challenge that Coldwater Creek faces is somehow returning to profitability. The company isn't the only big retailer to mount a substantial recovery, as Chico's FAS (NYS: CHS) and Ann (NYS: ANN) have not only posted more impressive share-price gains but also gotten a lot more profitable. Moreover, Coldwater will face further competitive threats from broad-based retailers Nordstrom (NYS: JWN) and Macy's (NYS: M) , both of which have used loyalty programs and web-based promotional deals to lure customers away from specialty retailers.
For Coldwater to hold onto its recent gains, it needs to ramp up its recovery a lot faster than analysts expect. Otherwise, the only hope for shareholders will be a private-equity buyer who sees more potential in the company than investors do right now.
Shop for great stocks
Don't settle for risky stock picks with less-than-stellar potential. Motley Fool Co-founder David Gardner has a better answer, as his Supernova service picks out revolutionary stocks with disruptive potential and then beats Wall Street to the punch by recommending them to his subscribers. Find out more about David's winning ways; click here to get instant access to a personal tour of Supernova today.
Click here to add Coldwater Creek to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
The article Can Coldwater Creek Stay Hot in 2013? originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.