Vera Bradley stock gyrates ビジネス

http://www.journalgazette.net/article/20120510/BIZ/305109940/1031/BIZ
Forget the flowered handbags and travel totes. The best bargain Vera Bradley is offering this Mother’s Day might be its own stock.
Shares of the Fort Wayne-based company are trading near a 52-week low despite generally positive reports from equity analysts and a 31 percent increase in annual profit, as reported March 14.
Wednesday’s close of $24.49, down 46 cents a share, is less than half the top trading price of $52.36 from one year ago.
Several factors could be contributing to the dip, including significant insider stock sales and concerns about the fickle world of fashion.
Vera Bradley Inc. makes quilted cotton handbags, luggage and accessories and trades on the Nasdaq stock exchange under VRA.
Vera Bradley spokeswoman Melissa Schenkel said the company doesn’t comment on its stock price.
Peter Wahlstrom, senior equity analyst with Morningstar Inc., has set the fair value of Vera Bradley stock at $33. Investors should consider buying if it falls to $16.50 and selling if it reaches $57.80, he said.
Raymond James & Associates, a competing research firm, on April 17 lowered its target price for Vera Bradley to $41 from $48, based on a change in its complex formula for determining value.
Wahlstrom sees potential for success if the designer bag maker effectively executes its growth plan. But he has reservations.
“We believe the firm’s long-term success will depend largely on its ability to maintain the brand by adjusting to rapidly changing fashion trends, a difficult task at best,” he wrote in a report dated April 30.
Baird Equity Research outlined several risks to Vera Bradley’s stock price in a report dated May 9.
More than half of Vera Bradley’s products are sold by small, independent retailers. If some were to close, it would cut into Vera Bradley’s distribution. Also, the recent recession has allowed Vera Bradley to negotiate lower rents for some company-owned stores. If rents surge, the new costs could cut the company’s profit.
Another factor influencing Vera Bradley’s share price is supply and demand.
From Feb. 1 to March 15, two directors have sold more than 530,000 shares of Vera Bradley stock, virtually flooding the market as they cash out part of their holdings.
During those six weeks, company co-founder Patricia Miller and her husband, Michael Miller, made more than $20 million from selling Vera Bradley stock, according to figures from Yahoo Finance.
Wahlstrom said such stock sales don’t hurt the company.
“It’s not like they’re destroying value by selling their shares or anything like that,” he said in a phone interview. “It’s just changing hands from private to public ownership.”
More insider sales are likely before Dec. 31. Five officers and directors on Feb. 2 filed stock-selling plans with the Securities and Exchange Commission.
About 3 million shares could be sold this year, according to the filings. They include 2.52 million owned by Patricia Miller and a trust under the direction of Michael Miller.

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