Blue Nile (NILE) shares are up more than 4% this afternoon following a favorable write-up in this week�s Barron�s. Tiffany (TIF) was flat and Zale’s (ZLC) was up 2.6%.
In “Another Chance to Sparkle,” Barron�s Senior Editor Jacqueline Doherty wrote that the online jeweler�s shares could rise 25% to $40 and that one of the company�s big strengths lies in its ability to undercut competitors in traditional shops by 20%-25%.
Ed Crotty, chief investment officer and portfolio manager with Davidson Investment Advisors, told Doherty that Blue Nile’s free cash flow, �is expected to sharply exceed earnings as revenue accelerates.�
Crotty, who owns about 3% of Blue Nile�s shares told Barron�s, said “As diamond prices stabilize, and growth becomes more visible, we expect shares to trade above $40 near-term and closer to $60 in the longer term.�
Shares of Blue Nile reached a 52-week low of $25.59 on May 8 after reaching a high of $50 on Nov. 8.
– Grace Williams
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