Should Investors Play It Safe With Genesco Stock?

GCO is up more than 55% year-over-year

facebook X logo linkedin


The shares of Genesco Inc. (NYSE:GCO) are up 2% to trade at $64.26 this morning. The security has been trading mostly sideways since surging to a Nov. 18, roughly five-year high of $73.72, stuck between a floor at the $56 level and a ceiling at the $66 mark. Shares still have the support of the 200-day moving average, however, despite a handful of brief dips below this trendline. Longer term, Genesco stock sports a 55.6% year-over-year lead. 

GCO 200 Day

Short sellers have been piling on the equity of late. Short interest added 25% over the last two reporting periods, and the 1.08 million shares sold short now account for 7.9% of the stock's available float, or more than one week's worth of pent-up buying power.

Short-term options traders have rarely been more call-biased, however. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 0.06, which sits higher than just 7% of readings from the past year. 

It's also worth noting the stock sports attractively priced premiums. GCO's Schaeffer's Volatility Index (SVI) of 49% stands in the relatively low 16th percentile of its annual range, meaning options traders' volatility expectations are ice-cold at the moment.

From a fundamental point of view, Genesco stock is seemingly undervalued by most metrics. The equity trades at a forward price-earnings ratio of 9.23, and a price-sales ratio of 0.39, both of which are low values for a small cap. 

However, GCO offers little growth opportunity, having increased revenues just 6.5% since 2019. Moreover, the company doesn’t hold the greatest balance sheet, with just $281 million in cash, and $734 million in total debt. Nevertheless, the retailer has made significant strides towards increasing its profitability in recent years, making it a decent option for value investors.

 

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.


Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!

 

 
 
 


 
 

Rainmaker Ads CGI