This has been a rumor for years, but I think this year it might actually happen. Over the past 6 years, GPS has bought back nearly 50% of its outstanding shares, and that includes 12% during 2010 alone. Plus they just authorized another $2 billion in buybacks. This has been smart by the company because the price of GPS has remained range bound for a long period of time. Also, GPS is slimming its stores down and focusing more on its global expansion into vibrant BRIC countries while closing underperforming U.S. stores. Despite rising commodity costs, GPS still has strong cash flow that it is returning to shareholders. Jim Cramer also said GPS would be bought out years ago. Cramer can sometimes be premature in his predictions, but in the end right. Thoughts?
This is a fact brother not a rumour, Eddie Lampert (ESL Investments) and Stevie Cohen (SAC Capital) Greenwich, CT hedge funds have been buying the GAP for a few months. They are huge players who think that GAP is a good asset and is oversold and undervalued. These two investors are among the smartest strategists on Wall Street.
Don't take these investors lightly. The majority of international bigtime investors would mortgage their homes to get a glimpse of what these market gurus are thinking. So if they take a position in GAP it is noteworthy. Eddie is the brains behind the SearsHoldings merger of KMart into Sears and also is a majority owner of Autonation.
I think he has plans for the GAP. So buy if you have the cash and hold them if you don't. My view is you will make bigtime profits betting with these hedgies.