JCG (J Crew Group Inc)

JCG came public in June and traded very well from the offering. After the first 2 days of very bullish trading, it pulled back and begain its first consolidation. It took 2 full months to work through the consolidation and then it broke to a new high (50% above the offering price) and marched steadily from there. It formed a base on base pattern and then i took my initial purchase as it broke to a new high from this consolidation. The stock quickly ran up to a fantastic gain and so when it pulled back I decided to add a few more shares to capture what i believed to be a very high probability of a retest of the high. I am still waiting for that re-test but the stock has continued to drift down into an area that should provide good support.

This is definitely a turnaround story fundamentally. The company lost money from 2002 through 2005 and basically broke even in FY 2006 (ending in Jan). However they are ramping up their margins and sales have grown at a respectable rate. The company is expected to earn nearly $1.00 per share this year when they report after this month, and next years estimates are looking attractive as well. I would really like to see the sales growth continue to feel comfortable holding this long-term. But for now, the momentum and the change in fundamental direction should drive some attractive stock action.