Opinions
Stephanie Link, Chief investment strategist, Hightower
Gap
GPS-N
BUY
Feb 28, 2025
$22.610
Stock price when the opinion was issued
specialty stores
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TOP PICK
Stockchase Research Editor: Michael O'Reilly We reiterate GPS as a TOP PICK. The company continues to demonstrate itself as a leader in e-commerce as an apparel retailer. It trades at 12x earnings, compared to peers at 19x. It pays a decent dividend, backed by a payout ratio under 25% of cash flow and cash reserves continue to grow. We would buy this with a relatively tight stop at $20.00 -- looking to achieve $34.00 (upside potential over 45%). Yield 2.12% (Analysts’ price target is $34.25)
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PAST TOP PICK
(A Top Pick Oct 14/21, Down 12%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with GPS has triggered its stop at $20. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 19%, considering the previous buy recommendation. We will look for better opportunities.
specialty stores
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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Likes CEO. It's been gaining market share for 7 straight quarters as inventory declines the past 8.