Ann Inc. (ANN-N)

(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.

(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.

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

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.

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.

Same story as Kohls. Same store sales numbers are not up but it is a late spring so you are not buying coloured bottoms or whatever is in fashion this year. Hurricane Sandy also is impacting them. When you look at cash flow it is just too good to pass up. You might want to wait for June 6^th for the Quarter end and see how it goes.