Leon Cooperman & Delia*s

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On November 4, 2013, Leon Cooperman’s Omega Advisors took more than a 4 million share position in Delia’s (See SEC Form 13G on Delias.com investor relations web site.)  DELiA*s is a small fashion company made popular by teenage girls who shop online and in malls across the country.  After facing stiff competition in recent years, Delia’s appears to be making a comeback.

According to SemRush.Com web traffic statistics, the Delia’s web website began attracting 30% more traffic than it had seen in the recent past.  This should bode well for fourth-quarter2013 sales and operating results.  It would seem that other investors have taken notice of this as well.  On January 27, 2014, Roice and Associates LLC filed a 13G, disclosing a 3.77% stake in the company, by purchasing roughly 2.6 million shares near the end of December.

In addition, it would appear that Mr. Cooperman has not reduced his position in Delia’s and is holding strong during what appears to be a recent sell off.

Delia’s reached a daily low of $.74 per share on 28 January 2014. Since Mr. Cooperman purchased his shares at an average cost of $1.19 per share, Delia’s appears to be trading at a fairly significant discount today.  In addition, Delia’s CEO, Tracy Gardner, maid an open-market purchase of 10,000 shares as disclosed on a form 4 filing on December 10, 2013, at an average price of $1.01 per share.

That said, based only on web traffic, I’d expect Delia’s to report increased sales of at least 25 to 30%.  Potentially more, if foot traffic also improved during the holiday season.

Since we saw a billionaire buy in early November, a CEO insider buy in early December, and a large block purchase in late January by Roice and Associates, Delia’s just might be a “buy” for the right investor.

Of course we’ll have to see the final 4th quarter and annual report for 2013 to see how they really did, but on the surface it doesn’t look too bad.

Disclosure Statement:  Based on the above information, we currently have a long position in DELiA*s and may take a larger position in the company during the next 48 hours.

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