Look, GS maintained a buy on ANF, took them off conviction list, acknowledging that domestic story is still bad an taking longer to repair than they thought. Right.
I own GS, too, so glad to say they are my crooks.
I think what's missing in the "modern" market is the sane-itizing effects of actual individual investors. Instead we have "pros" who constantly need to be doing something, when there just isn't much that needs to be done. So they play games instead. Which is just fine I guess, if it gives me a brief shot at $27 BKE when the simple FA says $35-$40. Mom and Pop still seem to be completely absent from this market, part of my theory at least for some of what I see as under valuations.
NMoll, see what I mean? Oppenheimer and Barclays downgraded ARO, which had 10% December SSS comps, raised guidance, has no debt and is trading at about 7.5x trailing enterprise value to free cash flow, to UNDERPERFORM (along with some others). The reasoning: the switch to lower priced goods is over, back to more expensive stuff (I guess like ANF). Analysts either do not get it and/or are shilling for traders.
Neither ARO nor BKE have any need to go to Wall Street for cash. They have plenty of their own, growing huge piles of it (BKE returning gobs of it to its owners, us).
Teens are not flocking back to ANF even if the economy picks back up. That fad is dead per almost all teens I talk to. It isn't just an economic cycle thing. And those attitudes, once changed, don't go back even if employment picked back up, which it hasn't yet.
Agreed, I'd say this can be a 1-3 year hold, maybe even a 1-10 or 20 year hold (like a wag going back 20 years). That's probably a bit optimistic for teen/fashion, but nobody seems to read trend better and they have room to double the store count eventually. Plenty of trading op too, that pricing around the special was pretty typical.
Could be. Likely an expensive waste of time strategy, as there are carrying costs to the short position. maybe they are making a mint, since the price does dip, although I think a lot of that is them.
The simple way to make money is to own good stocks like BKE, collect the dividend and wait. Maybe at the outside sell some covered calls or sell some when it gets a little frothy. I did sell some in the $37 area. Lucky timing, but I'd bought those in low $20s. And you have to tip your cap to them for selling them to you cheap.
really is possible too that the shorts aren't really shorts, possibly some complex options stratedgy / spread situation. I'm not betting on double dip recession but some still might be.
got bke, aro for retail, microcap value wtt, watching value tbac for turnaround, got a bunch of cheap hpt with div just restored. life is good right now, sure feels better than March!
Reversion to mean, tough comps, reversal of trend away from ANF type hype, etc. Economy good, money goes to high end, economy bad, all retail hit.... Who knows what the morons think, I have been fleecing them for 2 years now. Just saying they sometimes attack even good sss numbers, and sell the gap up. Not always, hard to tell with traders.
don't forget 2 things; 1; BKE did not have any serious weather related issues leading up to Christmas as did all chains with presence on East Coast. 2; Midwest has not experienced quite the dramatic effects of this recession as the 2 coasts did. That, along with their strong brands, good margins, cost control and no borrowings is a recipe for a big surprise.
my 2 cents!