Investors Are Betting Big Against Iconix Brand Group, Inc. (ICON). Are They Right?

In the latest fortnight, short interest in Iconix Brand Group, Inc. (NASDAQ:ICON) stock jumped by 6.51%, indicating a significant rise in bearish sentiment. When it comes to determining how a name is viewed by investors, short interest is often a useful tool. The average analyst recommendations at 0 suggests selling these shares. Between January 15 and January 31, the total number of shorted shares amounted to 6.85 million shares. That was 418,903 more shares than the total of 6.43 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go down. Average daily volume for ICON at the January 31st settlement plunged to 1,108,487, as compared to 1,439,273 at the January 15th report. That brought days to cover to 6.179674, a 38.3% increase from the 4.468357 days to cover recorded at the prior short interest data release.

Investors will get their next glimpse of ICON’s Q4 earnings on March 16. Analysts are forecasting revenue to suffer decline of -13.1 percent to $46.22M in the next fiscal quarter, while earnings are seen soaring by nearly -100 percent to $0 per share. History has shown that shares in Iconix Brand Group, Inc. have gone up on 18 different earnings reaction days and are predicted to add 0.05 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.12 per share, in line with the $0.12, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $50.21M, worse than the $54M analysts expected. Earnings are estimated to increase by -80.4 percent this year, 0 percent next year and continue to increase by 15 percent annually for the next 5 years.

Iconix Brand Group, Inc. (ICON) will probably climb -100 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $0.8 price as 12-month high target. This represents a whopping 321.05 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $0.8, which represents a return potential of 321.05 percent when compared to the closing price of the stock of $0.19 on Wednesday, February 13. The lowest price target for the stock is $0.8 — slightly more than 321.05 percent from ICON’s current share price.

The stock is currently hovering around the first support level of $0.17. Below this, the next support is placed in the zone of $0.14. Till the time, the ICON stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 67.99 on daily chart, which may remain a cause for concern. If the price breaks below $0.14 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $0.2 mark may result into a pull-back move towards $0.22 level.

On 13th of February, Iconix Brand Group, Inc. (NASDAQ:ICON) shares ended higher after a volatile session. The shares accumulated 0.03 points or 17.61 percent at $0.19 with a heavy trade volume of 4.35 million shares. After opening the session at $0.162, the shares went as high as $0.195 and as low as $0.159, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $14.68 million and now has 78.48 million shares outstanding. Iconix Brand Group, Inc. (ICON) stock has gained 52.16 percent of market value in 21 trading days.

ICON stock has a trailing 3-year beta of 2.33, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.43 a share in the trailing twelve months. The stock’s value has surged 123.95 percent year to date (YTD) against a decline of -89.19 percent in 12 month’s time. The company’s shares still trade -89.73 percent away from its 1-year high of $1.82 and 156.16 percent up from 52-week low of $0.07. The average consensus rating on the company is 0, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of Iconix Brand Group, Inc. (ICON) are trading at a P/E ratio of 0 times earnings reported for the past 12 months. The industry ICON operates in has an average P/E of 26.08. Its P/E ratio went as low as 14.68X and as high as 22.97 over the 5-year span. Further, it is sporting a 0.07 on the Price-to-Sales ratio. Compare this with the industry average P/S of 2.78. 0 percent is the gross profit margin for Iconix Brand Group, Inc. and operating margin sits at -21.5 percent. Along with this, the net profit margin is -7.1 percent.

Let’s take a look at some insider activity at Iconix Brand Group, Inc. (NASDAQ:ICON) and see the pattern. The earliest insider trade took place on 09/19/2018. Cuneo F Peter parted with a total of 44.35 thousand shares of company at average share price of $0.26. The total for the sales was set at $11.53 thousand. After this transaction, the Chairman and Interim CEO account balance stood at 52.24 thousand shares. The stock lost -26.92 percent since that insider sale. On 09/18/2018, Cuneo F Peter, Chairman and Interim CEO, sold 96.59 thousand shares at a price per share of $0.28. This removed 27.05 thousand shares from the insider’s fortune and the stock saw a -32.14 percent retreat in value since the news became public. This transaction left 79.36 thousand shares in the Chairman and Interim CEO account.

On 09/17/2018, Chairman and Interim CEO Cuneo F Peter performed a sale transaction worth $46.8 thousand. This sale at $0.26 each has eliminated 179.99 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -26.92 percent decrease since the transaction was reported. The insider now is left with 175.96 thousand shares remaining in the account. Blumberg David, who performs the EVP – Chief Strategy Officer job, sold 11 thousand shares for $83.71 thousand. The disposal occurred on 05/19/2016 was priced at $7.61 per share. The share price plunged -97.5 percent since the reporting date. Blumberg David now left with a stake of 138.52 thousand ICON stock worth $26.32 thousand after the insider selling.