Forget handbags flowers and travel totes. Negotiated that Vera Bradley offers this mother's day can be its own stock.
Fort Wayne-based company's shares are traded close to 52-week low despite generally positive reports of analysts and an increase of 31% of annual profit, as reported on 14 March.
Wednesday closing of $24.49, down 46 cents per share, is less than half the high trading price of $52.36 of a year ago.
Several factors may contribute to the dip, including the sales of important stock of insiders and the concerns on the fickle world of fashion.
Vera Bradley Inc. made accessories, luggage and bags hand quilted cotton and trades on the Nasdaq under ARV stock exchange.
Vera Bradley spokesperson Melissa Schenkel said that the company does not comment on its stock exchange.
Peter Wahlstrom, senior analyst of fairness with Morningstar Inc., has set the fair value of the shares of Vera Bradley at $33. Investors should consider if it falls to $16.50 the purchase and the sale if it reaches $57.80, said.
Raymond James & Associates, a firm of concurrent research, April 17 lowered its price target for Vera Bradley $ 41 to $48, based on a change in its complex formula to determine the value.
Wahlstrom sees the chances of success if the manufacturer of bag designer running effectively its growth plan. But he has reservations.
"We believe that long-term business success will depend in large part on its ability to maintain the mark to adapt to the rapid evolution in the best fashion trends, a difficult task," writes in a report dated April 30.
Research on the actions of Baird described several risks in the stock market of Vera Bradley in a report dated May 9.
More than half of Vera Bradley products are sold by small, independent retailers. If some family members, it would cut distribution of Vera Bradley. Also, the recent recession has allowed Vera Bradley to negotiate lower rents for some stores owned by the company. If rents wave, the new costs could reduce the profits of the company.
Another factor influencing the price of the part of Vera Bradley is the supply and demand.
From February 1 to March 15, the two directors have sold more than 530,000 shares of Vera Bradley, virtually flooding the market as they sell part of their holdings.
In the course of six weeks, co-founder of the company Patricia Miller and her husband, Michael Miller, who made more than 20 million dollars from the sale of stock of Vera Bradley, according to figures from the Ministry of Finance of Yahoo.
Wahlstrom said that these stocks sales hurt the company.
"It is not as if they destroy you the value in selling their shares or something like that", he said in a telephone interview. "It is just changing the hands of the private sector to public property."
More than sales of insiders are likely before December 31. Five officers and directors on 2 February filed plans sale of stock with the Securities and Exchange Commission.
About 3 million shares could be sold this year, according to the filings. They include 2.52 million belonging to Patricia Miller and a trust under the direction of Michael Miller.
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