Jennifer Radman Ann Inc. ANN-N TOP PICK May 30, 2013

Women’s wear. Very competitive business but this one has generated great return on capital over time. She is in a phase where there are questions over their ability to expand margins but they are in a net cash position. Free cash flow is strong and she likes the yield. Catalyst for this is if they have a couple of quarters where they really hit strongly on merchandising, which is very doable, you’ll get a much higher multiple.

This has reached a pretty decent entry point. A lot of this is because of people staying indoors and the retail environment in general. Seems to be in a very good position from an inventory standpoint. Good inventory levels and a good type of inventory for spring fashion.

Strong balance sheet. The manage team is acting with a sense of urgency. A pretty compelling entry point here.

(Top Pick Aug 1/13, Up 20.85%) There has been a pickup in sales. People are not seeing that explosion of traffic that everyone saw coming out of that horrible winter. She is still good here.

(Top Pick Jan 10/14, Down 2.39%) This one is lagging. As long as she sees management doing something she sticks with the name.