The move in Skechers USA (NYSE: SKX) from the March lows pales in comparison to the triples or more seen in some retail stocks.
That said, SKX did more than double in value before pulling back in early May. Much of that gain happened on the heels of a better-than-expected earnings report that showed the company making a small profit.
Wall Street was expecting a small loss. No matter that profits dropped by 75% as compared to one year ago. Indeed a recovery suggests that earnings at this level will not last forever, but the earnings march higher is likely to be a longer process than currently expected. Nor will it be a straight line. What is more likely is a bumpy recovery that has fits and starts.
Stocks like SKX can be traded as we bounce between recovery and recession. At this moment, I would be a seller of SKX.
Be sure to see the complete list of consumer stocks to sell now.
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