Randall Abramson
Aeropostale Inc.
ARO-N
DON'T BUY
Feb 14, 2012
Prefers American Eagle (AEO-N). Clothing retailers move between 8 and 20% margins. Buy them at low margins and hold for 24%. A dividend while you wait helps.
Over 170 stores that are doing over $800 per square foot. Incredible operating metrics and really beating out competition on all fronts. Revenues growing even in this difficult environment. Strong cash position and buying back shares. Trading at 12X earnings.
Same store sales through Christmas were down and they are having trouble getting traction, so stay clear. Teenagers are even harder to get it right with in terms of fashion retailing.
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