A couple of household names that were once hot stocks are enjoying mind-boggling returns this year.
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For example, shares of Vera Bradley are up 5 percent Thursday and up 67 percent for the year while Avon and Pier One Imports are up 81 percent and 259 percent for the year respectively.
In an interview on “Making Money with Charles Payne”, Simpler Trading director of options and trader specialist Danielle Shay said that Avon and Vera Bradley are two household names that she’s looking at.
“I really like Avon as well as Vera Bradley, especially because of the way that they performed after their respective earnings reports,” she said. “When something gaps up after an earnings report or has had several quarters in a row of positive growth, I think it’s a great time to look at it again.“
Despite its high return for the year, Pier One Imports shares plunged more than 45 percent Thursday after Reuters reported that the home decoration company “tapped debt restructuring lawyers to navigate potential negotiations with lenders as it struggles with falling sales.”
FOX Business’ Charles Payne says the news “underscores the risk-reward in buying into these names” but "many investors I know always want to buy them” and “if they bought it in January, they were right.”
Shay, however, still doesn't see a stock like Pier One as a buy.
“Pier One is a little bit more difficult for me because of the amount that it has fallen today…I want to see something fall kind of within the expected move or maybe twice the expected move on the week and then I want to see it kind of even out and then start to shift higher…once it starts to shift higher that’s telling me it’s time to go for it.
Instead, she sees a household name like Chegg, the education technology company, as a better investment, which was just $4 per share a few years ago and is now $41 per share.
“I really like Chegg and, you know, if you think about it student debt right now is huge. The cost of college is just incredible and students have to figure out a way to save money. That’s what Chegg does,” Shay said.
She added that millennials' spending habits are important to take into account because they are making an impact on investors' decisions on Wall Street.
"You have to look at the way millennials are spending their money. We value experience over possessions and that’s showing in specific stock charts.”