• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

3 Recent Doormats in Retail Suddenly Spring to Life

Fossil Group, Michaels Companies and GameStop surged higher on Monday, likely for their own unique reasons.
By JONATHAN HELLER
Jun 09, 2020 | 10:00 AM EDT
Stocks quotes in this article: FOSL, MIK, GME

Many downtrodden names really had quite a day on Monday. That included some that suffered to a greater degree than most during the great pandemic meltdown of 2020. These companies generally had a flea or two prior to the pandemic, but recent movements are unlike anything I've seen previously, and I know I've been saying that a lot these days.

Retail was in trouble long before the pandemic, and that's when stores were actually open and customers were allowed in the doors. A forced and near-total shutdown of many retailers, the unthinkable, probably hastened or will hasten the bankruptcies of some. However, markets again may be rethinking who will be next and when they will succumb, all of which has led to some terribly inefficient markets. That inefficiency, by the way, can be great for investors. 

Specialty retailer Fossil Group (FOSL) , the subject of Friday's column, jumped 54% to $8.10 on Monday to a five-month high. Why, I am not quite sure, but it likely was a combination of a new credit agreement announced after the market close last Friday that waived leverage ratios for fiscal 2020 and the first three quarters of 2021; perhaps some short covering, given that about 29% of shares were sold short; and the lifting of the veil as retail is reopening. It's nice to be back above water with my second-ever FOSL position, especially because I broke a self-imposed rule: take a position, and once it is closed, move on.

Arts and crafts name Michaels Companies (MIK) (up 59%) also had a huge day. Shares that traded in the mid-$1 range in March hit $8.74 on Monday. This move was easier to explain, as J.P. Morgan upgraded MIK to "overweight" and added it to its "U.S. Equity Analyst Focus List." Short covering may also have helped, with 40% of Michaels' shares sold short.

Finally, struggling gaming retailer GameStop Corp. (GME) rose 21%. Another name with massive short interest, it is also a situation that could be coming to a head given the current proxy contest that will be settled on Friday at the annual meeting.

The thing that has made the GameStop proxy fight even more interesting is that both Glass Lewis and ISS last week recommended investors side with the activists (Hestia and Permit) and vote for their director candidates Kurt Wolf and Paul Evans. I've followed a lot of these situations over the years, and in my experience the proxy firms have rarely supported the activists. It may just be those proxy fights that I've been interested in, because last year Glass Lewis supported activists 33% of the time, while ISS did the same 43% of the time.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Heller was long FOSL and GME.

TAGS: Activist investing | Corporate Governance | Investing | Stocks | Value Investing | Apparel | Consumer | Retail | Real Money

More from Stocks

Tesla's Charts Are Resisting a Downside Break

Bruce Kamich
Jul 5, 2022 1:54 PM EDT

Here's what aggressive traders could do.

We Can't Predict the Rest of 2022, but We Must Have a Game Plan

Brad Ginesin
Jul 5, 2022 1:30 PM EDT

Many are forecasting bad times ahead, but are they going to extremes? Here's my strategy for the the second half of the year.

When Did We Stop Worrying About the Wealth Effect?

Peter Tchir
Jul 5, 2022 1:00 PM EDT

This looks like a market pricing in a recession/policy mistake.

Ford's Decline Is Decelerating

Bruce Kamich
Jul 5, 2022 12:31 PM EDT

Watch this key price level when things could shift.

Progressive's Commercials Are Well Known, But What About Its Charts?

Bruce Kamich
Jul 5, 2022 11:54 AM EDT

Traders could probe the long side of PGR.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:01 PM EDT PAUL PRICE

    A Recent Director Buy in Children's Place (PLCE)

    Four of the most recent insider trades in Children...
  • 07:34 AM EDT PAUL PRICE

    A $525,000 Vote of Confidence on Macerich (MAC)

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login