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5 Apparel Stocks That Could Pop in 2012

Iconix Brand Group

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Iconix Brand Group (ICON) is a small-cap apparel stock that's seen its shares slide more than 14% so far in 2011. When short-sellers smell blood in the water, they tend to pounce -- and pounce they have, ratcheting Iconix's short ratio up to 11.1.

Despite that shorting, there's reason to pay attention to the other side of this trade right now.

While it's outwardly been a difficult environment for clothing manufacturers, some firms have been faring better than others. Iconix, for instance, has increased its revenue during each year of the recession, increasing sales by 108% between 2006 and the end of fiscal 2010. This year, the firm is on track to deliver double-digit growth once again.

>>5 Earnings Stocks Poised to Pop

Iconix is primarily a licensing firm, eschewing manufacturing and sticking to the higher-margin side of the apparel business. Clothing brands in the firm's portfolio include well known names such as Candie's, Mossimo, Joe Boxer, and Badgley Mischka.

Iconix has slowly been chipping away at its debt load over the last few years, while building up a more comfortable cash position at the same time. That's provided the firm with an overall liquidity boost that investors should be appreciating right now.

The firm's fourth-quarter earnings call in early 2012 could be a strong catalyst for a squeeze in share prices.

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