בס״ד

You Say You Want a Revolution… (RVLV)

Posted on January 11, 2021

Today’s trade rides the back of the most overbought market we’ve seen in the last fourteen years.

Several of our own proprietary metrics are now off the charts – specifically, one ratio measure of what we term ‘cheap stocks’ vs. ‘top-outs’.  Nary have we seen a wider spread between the two.

And by far.

Saddle Up!

And it’s with that in my mind that we’ve got the saddle firmly strapped to the Revolve Group (NASDAQ:RVLV), an outfit that retails clothing online (where else?) for those seeking the threads of ‘global fashion influencers’.

Doesn’t matter that the numbers don’t really add up, of course, when you cross the world of runway fashion design with Batflu ecommerce.  It’s a conclusion foregone that the masses will buy, right?

Up, up and away, and all that, right?

Well, maybe…?

Until the revolution comes, that is.

Now, we don’t purport to any divine knowledge, per se, but we are Jews, so that should count for something, no?  The sons of prophets we are, after all…

And so we offer the following.

The Government of the United States of America will shortly pass a bill that will spin trillions of dollars in the direction of the stock market.

And Wall Street, being the clever lads and lasses that they are, will sell into all that new buying, sending the market gyrating into a brief but significant tizzy, only to move in, cat-like, to scoop up the goods at far cheaper prices after the fall.

Not sure of the time frame here, but if last year’s top-out/sell-off is any guide, we could be looking toward a late March bottom.

Fundamentals look as follows –

  • Revolve trades with a P/E of 52.27,
  • A Price to Book ratio of 13.53,
  • A dividend yield of bupkus,
  • Posts a quarter over quarter decline in sales of 2.2%,
  • A one year earnings decline of 120% (!),
  • And – get this – in the last six months, insiders have divorced themselves of 99.28% of their holdings!  That works out to $575 million worth of stock – if you care to ascribe meaning to such trifles.

Here’s the company’s chart for the last six months –

With kind regards,

Hugh L. O’Haynew

 

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