Is Revlon (Symbol: REV) now a trade? In my June 14, 2007 article, “Revlon Remains Flat,” I told you that Revlon would stumble by 10-20% over the summer. It’s happened.
Revlon was $1.36 when I wrote that article and today it closed at $1.04—about 25.5% down. It’s dropped about 10 cents per share over the past couple of trading days.
While the company isn’t worth going long in, it might be worth trading. I think this trade is especially appealing for those with limited capital.
For instance, a bump back to typical levels will mean a 6-8 cent per share rise—or 5-8% increase from it’s current price. And more after it falls, which I believe it will.
Revlon reports earnings on August 08, 2007. The consensus is that Revlon will report a net loss of $0.07 per share, but I think they’ll miss that number. I’m looking for something closer to a net loss of $0.11 per share.
And when that happens, I’m expecting a further drop in the stock and the opening of a nice opportunity to buy and hold very short-term for a quick bump. At some point during one of the upcoming days Revlon will fall below $1 per share and I won’t be surprised to see it at $0.80 – $0.90.
Today, volume spiked past the average—2,304,900 shares traded. Activity is heating up and it’s signaling more sell offs.
For those who love their history, this stock did fall below $1 per share last year and it rebounded.
Just a warning, this is a speculation play. I would not own it before earnings come out. I think the earnings report could be a catalyst to getting this stock where we want it—$0.95 or lower.
There are many ways to play the stock. I’d love to hear your ideas for playing with Revlon.
My name is Jason A. Martin. I'm an investor/trader and financial writer. This is my blog. I also run a site dedicated to currency trading at CapitalistNation.com. If you'd like to follow me on twitter, here's the link: Jason A. Martin If you need financial content (articles, newsletters, eBooks, etc) for your site, publication and/or business, go to FinancialWriter.org (my service) for more details.
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My name is Jason A. Martin and this is my investment blog. Back in Jr. High School I fell in love with an electrical wiring company's stock on Wall Street. After following the stock daily in the papers—the Internet wasn't around back then—I sent them a letter and they sent me back all sorts of wonderful information about their company.
In High School, we had a stock market contest. All the kids were picking companies that made stuff they consumed. When I announced my beloved company, I was laughed at. Little did they know that my company was going to be the subject of a takeover soon.
Long story short, I won the contest and have made money in the stock market, through real estate investing, currency trading and so forth.
I hope you enjoy Financial Rebel. If you do, please leave your comments and share this site with those you know. I also run a currency trading blog over at CapitalistNation.com.
Jason
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