LOV is a growth stock that keeps impressing/surprising us; it opened 74 new stores in fiscal 1H. The company’s recent result went down exceptionally well, with its 50c dividend a standout beat, but gross margins improving when they were expected to have deteriorated was the primary catalyst to propel the stock over 20% higher in the blink of an eye with management saying “margin expansion was driven by price and promotion management plus strong execution on product and inventory controls = a well-oiled machine. However, with trading down slightly in the first seven weeks of 2H, we wouldn’t be chasing strength.
- We like LOV under $30, but its volatility shouldn’t be underestimated.
MM is cautiously bullish towards LOV ~$30
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