Opinions
Stephanie Link, Chief investment strategist, Hightower
Gap
GPS-N
BUY
Sep 27, 2024
$21.420
Stock price when the opinion was issued
specialty stores
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SELL
He sold 20 positions and now has his highest cash position (over 60%) since 2008. The reason is that he doesn't know what will happen with the economy and is bracing for a big decline if that happens. If so, he will buy back these shares at a lot lower price. He sold Gap, among others. He often gets Gap emails touting 60-70% off. He sold many retailers, because he expects them to slash prices to move inventory. Higher interest rates are another worry.
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WEAK BUY
Really suffering today, despite the good print. Company estimated $300M in costs due to tariffs, but that tariffs will be neutral in the long term. If you're looking for a retail stock, a good name to buy now.
But is retail a good thing to own? It's a very tough trade, just like airlines. You have to be right, and it's very economically sensitive. Jeff Bezos says that, eventually, all retailers go broke.
specialty stores
She added to the Gap, purely because of the CEO change, and it's taken time for him to make an impact by hiring new executives to his team, resulting in inventory control and better gross margins. Have been gaining market share for the last 6 quarters.