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Naked Brand

It is really a case of strong fundamentals, strong technicals

the possibility for some major near term catalysts all wrapped into one stock


Date : May 11, 2017

The NAKD Story Could be Catching Fire

New Opportunity:  Naked Brand Group Inc. (NASDAQ: NAKD)

As you know, we don’t like to throw tickers randomly at the wall to see which ones stick. We look for scenarios that contain truly special opportunity. Right now, NAKD looks very promising in that regard.

We lay out the case in detail below. It really is a case of strong fundamentals, strong technicals, and the possibility for some major near term catalysts all wrapped into one stock. Check it out!

Symbol:  NAKD

Company:  Naked Brand Group Inc.

Quote:  http://finance.yahoo.com/q?s=NAKD

Latest News:  http://finance.yahoo.com/q/h?s=NAKD+Headlines

Company Website:  http://www.nakedbrands.com

nakd brand group

Who is NAKD

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Naked was founded on one basic desire–to create a new standard for how products worn close to the skin fit, feel, and function.

Naked’s women’s and men’s collections are available at www.wearnaked.com, and Naked has a growing retail footprint for its innovative and luxurious innerwear products in some of the leading online and department stores in North America including Nordstrom, Bloomingdale’s, Dillard’s, Soma, Saks Fifth Avenue, Amazon.com, BareNecessities.com, and more.

In 2014, renowned designer and sleepwear pioneer Carole Hochman joined Naked as Chief Executive Officer, Chief Creative Officer, and Chairwoman with the goal of growing Naked into a global lifestyle brand.

In June 2015, Naked announced a strategic partnership with NBA Miami HEAT (now Chicago Bulls) star Dwyane Wade. The 3-time NBA Champion, 11-time All Star, and Olympic Gold Medalist joined Naked’s Advisory Board, and is the Creative Director for a signature collection of men’s innerwear which launched in 2016.

Naked is headquartered in New York City and plans to expand in the future into other apparel and product categories that can exemplify the mission of the brand, such as activewear, swimwear, sportswear and more.

Recent Catalysts

While there are a myriad of catalysts here to parse through that suggest Opportunity with a capital “O”, the simplest one is the company’s recent financial results for its fiscal Q4 ’17. Sales growth on a quarterly y/y basis was about 22%, with gross margins at 49.3%, compared to (39.0)% for the same period of fiscal 2016. The increase was primarily due to enhanced production efficiencies, as well as a product mix shift benefit.

More importantly, we saw meaningful improvement on the bottom line: For Q4 2017, the company’s operating loss was $2.6M, compared to an operating loss of $3.2M for the same period of fiscal 2016.

So, everything is moving in the right direction, which attests to having the right management systems in place. The key from there is to find economies of scale, and qualitative pathways to leap to a new market scope.

Management is working on that right now: the company has a proposed merger underway with Bendon Limited, an iconic New Zealand intimate apparel company. Bendon’s brands currently include Stella McCartney Lingerie and Swimwear, Bendon, Bendon Man, Heidi Klum Intimates and Swimwear, and a few other brands.

The key boils down to this: because of the far wider distribution channel set available to Bendon, the merged entity would massively increase the accessible market in play for NAKD products.

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The merger is subject to shareholder approval by vote. The company recently amended the terms favorably, which should increase the likelihood of a shareholder approval vote:

The third amendment includes $34M in positive adjustments to the net debt target for the anticipated combined company’s balance sheet at the close of the transaction. As contemplated under the Amendment, the combined company would have total net debt of approximately $13M upon transaction close, with approximately $6M in assets under Naked, and $19M in net debt under Bendon. This compares to the previously contemplated total net debt of approximately $51M , with $1M in assets under Naked and $52M in debt under Bendon.

Note, the company has also been leveraging star power, as we noted above, as best characterized by its partnership with NBA star Dwayne Wade. In October 2016, Naked launched its Wade x Naked collection at Nordstrom. Naked CEO Carol Hochman has worked alongside the NBA star to develop the collection’s products.

Technical Analysis

Now, let’s turn to the chart.

The first thing to notice is the overall change in trajectory (from bearish trend to bullish trend) that swings around the new year. That is built of a combination of the company’s strong financials, exchange compliance, and the letter of intent to merge with Bendon.

The question that arises after the big thrust is how the stock will handle key support. Well, in recent days, we just got quite a signal, with shares of NAKD testing the 200-day simple moving average with RSI ticking down to extreme oversold. At the same time, the price band in the $1.75 area (that used to be key resistance during the prior bearish trend) held as support.

The response to these factors was a huge burst of buying that has strongly confirmed the key level and acts as a very promising signal about the sustainability of the new bullish trend.

NAKD. Chart

About NAKD

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NAKD (Naked Brand Group Inc.) is an apparel and lifestyle brand company that is currently focused on innerwear products for women and men.

 NAKD manufactures and sells men’s and women’s underwear, intimate apparel, loungewear and sleepwear through retail partners and direct to consumer through an online retail store.

Naked has a growing retail footprint for its innovative and luxurious innerwear products in some of the leading online and department stores in North America. In 2014, renowned designer and sleepwear pioneer Carole Hochman joined Naked as Chief Executive Officer, Chief Creative Officer, and Chairwoman with the goal of growing Naked into a global lifestyle brand.

Naked is now headquartered in New York City and plans to expand in the future into other apparel and product categories that can exemplify the mission of the brand, such as activewear, swimwear, sportswear and more.

Highlights:

  1. 1) NAKD just reported another very strong quarter of growth with a huge improvement on both gross margin and bottom line numbers.
  2. 2) NAKD is making real money, with trailing revs already coming in at $1.8M.
  3. 3) NAKD is starting to see major topline growth, with quarterly y/y revs increasing at 22%.
  4. 4) NAKD is moving toward a proposed merger with iconic New Zealand intimate apparel company, Bendon Limited, and has recently amended the terms favorably, which should increase the likelihood of a shareholder approval vote.
  5. 5) NAKD is coming off an RSI trough around 30, pointing to a massively oversold stock now heading back the other way.
  6. 6) NAKD just recorded a MACD Bullish reversal, suggesting a technical change in trend from bearish to bullish.
  7. 7) NAKD shares just held the key 200-day simple moving average in strong fashion.

Conclusion

NAKD has been displaying some very strong technical signals amid a string of key positive catalysts. Company management has performed bigtime of late putting the company in position to push forward with the landmark merger with Bendon Limited.

The show of strong support at the key level in recent days could very well be a sign of “smart money” positioning for a coming catalyst. It may also act as a beacon showing other investors and money managers that the stock has a serious bid into pullbacks, which could drive the tone over coming days and potentially set up some very intriguing action.

Disclaimer :

We do not advise any reader take any specific action. Losses can be larger than expected if the company experiences any problems with liquidity or wide spreads. Our website and newsletter are for entertainment purposes only. MyBestStockPicks engaged in the business of marketing and advertising companies. All content on our website is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities. Neither the information presented nor any statement or expression of opinion, or any other matter herein, directly or indirectly constitutes a solicitation of the purchase or sale of any securities. Neither the owner of Our Newsletter nor any of its members, officers, directors, contractors or employees are licensed broker-dealers, account representatives, market makers, investment bankers, investment advisors, analyst or underwriters. Investing in securities, including the securities of those companies profiled or discussed on this website is for individuals tolerant of high risks. Never invest purely based on our alerts. Gains mentioned in our newsletter and on our website may be based on end-of-day or intraday data. This publication and their owners and affiliates may hold positions in the securities mentioned in our alerts, which we may sell at any time without notice to our subscribers, which may have a negative impact on share prices. If we own any shares we will list the information relevant to the stock and number of shares here.  Mybeststockpicks owns no shares of any of the companies mentioned here within, nor intends to buy any in the future.  Mybeststockpicks  has been compensated total of two thousand dollars by ALG Financial  to perform 1 week  investors awareness advertisement on  NAKD starting 11/052017

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