This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Jones Group Gets Boost From Spinoff Talks

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- The Jones Group's (JNY) stock gained last week after the news that it is in talks with Israel's Delta Galil Industries to sell its Jeanswear Division for an estimated $350 million to $400 million.

The market responded favorably, with the stock gaining as much as 11% on the day of the announcement. Jones Apparel competes with brands like Liz Claiborne (LIZ) and Phillips-Van Heusen (PVH) as well as department store mainstays such as Polo Ralph Lauren (RL) and store-owned private labels.

We discussed this favorable response in an earlier article.

The increase in investor's confidence was based primarily on the impression that Jones is trying to focus entirely on the luxury segment while moving away from the value-based business such as jeanswear. Jeanswear is the lowest distribution channel of Jones carrying an EBITDA margin in the range of 9% to 10%.

Overall we're positive on the stock as we believe by shifting its focus on luxury brands, Jones will be able to counter the margin headwinds more effectively since luxury brands are more resilient to cost pressures than value-based brands.

Our price estimate for Jones Group stands at $15.64 , implying an upside of nearly 50% to the market price.

Click here to understand how Trefis gauges the impact of a company's product on its stock price.

Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
JNY $14.99 0.20%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs