Back to top

Bull of the Day

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Know of a hot consumer brand? Odds are good that it might be owned by Iconix Brand Group, Inc. (ICON - Analyst Report). The company continues to expand its brand empire, having just added the rest of Ecko and Marc Ecko Cut & Sew under its banner. Earnings on this Zacks Rank #1 (Strong Buy) are expected to jump by the double digits this year.

You might not know of Iconix but you know its brands. In addition to Ecko, it owns Candies, Bongo, Badgley Mischka, Joe Boxer, Rampage, Mudd, London Fog, Danskin, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Umbro, Lee Cooper, Ed Hardy, and Sharper Image.

It also owns an interest in Artful Dodger, Material Girl, Peanuts, Truth or Dare, Billionaire Boys Club, Ice Cream, Modern Amusement and Buffalo. It licenses out the brands to retailers so it doesn't actually manufacture anything. The company holds no inventory which puts it in a unique position in the world of retail.

On May 24, it acquired the remaining 49% interest in IP Holdings Unlimited, the owner of men's brands Ecko Unltd and Marc Ecko Cut & Sew, including trademarks for $45 million. It was already the core apparel licensee for the brands. It is sold in 5,000 stores in 60 countries and has about 100 stand-alone retail stores.

Record Revenue in the First Quarter of 2013

On Apr 24, Iconix reported first quarter 2013 results and beat the Zacks Consensus by 5.8%. It was the fourth consecutive earnings beat.

Revenue jumped 19% to a record $105.1 million as the company said it was off to a strong start to the year. It had completed 3 acquisitions in the prior five months which boosted the quarter.

Iconix raised its full year EPS guidance to a range of $2.10 to $2.20 from $2.05 to $2.15. It expects over 20% revenue and EPS growth for the full year.

The analysts are equally as bullish. They expect earnings to jump 27.7% in 2013 and another 9% in 2014. The Zacks Consensus is looking for the higher end of the company's guidance range. It's calling for $2.17.

Valuations Still Attractive

In addition to double digit earnings and revenue growth, an investor is also getting value. Iconix trades with a forward P/E of just 13.9. That's under the average of the S&P 500 which is 15x.

It also has a price-to-book ratio of just 1.5. A P/B ratio under 3.0 usually means there is value.

Shares at 5-Year High

With stocks near all-time highs, it's not surprising to see that shares of Iconix are also at multi-year highs.

The earnings beat combined with the boost to guidance has pushed the stock higher in 2013.

But with strong growth expected to continue through the end of this year, an investor has the rare opportunity to buy a value stock with double digit growth. This is a Zacks Bull of the Day worth checking out.

Want More of Our Best Recommendations?

Zacks' Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Then each week he hand-selects the most compelling trades and serves them up to you in a new program called Zacks Confidential.

Learn More>>

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E HOUSECHINA EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%
INTERNATIONA ICAGY 33.30 +5.38%