Do Not Overlook This Small-Cap Retail Stock

Buckle will report earnings on Friday, Aug. 20 before the open

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Apparel company Buckle, Inc. (NYSE:BKE) steps into the earnings confessional before the market opens this Friday, Aug. 20. Ahead of the event, here's what potential retail traders and investors should know about BKE.

Buckle stock has a mixed history of post-earnings reactions. There's a muted 1.1% pop back in May, while an 18.8% burst in August of 2020. Four of the company's last eight reports have resulted in post-earnings moves to the upside. Overall, BKE averages a post-earnings move of 7.1% in the last two years, regardless of direction. This time around, the options market is pricing in a larger-than-usual post-earnings move of 10%.

Buckle stock is up 45% in 2021, and 154% in the last 12 months. While the shares have shed nearly 15% this quarter, the pullback has found support at their 160-day moving average. Moreover, The Buckle offers a forward dividend of $1.32 and a dividend yield 2.97%.

BKE Stock Chart

A short squeeze could help BKE return to its record high levels of $50.78 from July 1. Short interest is starting to taper off, yet the 5.55 million shares sold short accounts for 18.7% of BKE's total available float. At the stock's average pace of trading, it would take nearly 10 days for shorts to buy back their bearish bets. 

Overall, BKE offers a great opportunity for long-term investors. In addition to providing a decent dividend yield, Buckle stock has a great valuation and currently trades at an amazing price-earnings ratio of 10.46. The retail brand has also grown revenues by 23% since fiscal 2018 and has increased net income by 122% since fiscal 2017. Moreover, Buckle has a solid balance sheet with $394 million in cash and $308 million in debt, giving the company stability for the next few years.

 

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