Aeropostale, Inc. (NYSE:ARO)

Aero continues to rise in popularity. I feel like it is a trend setting company and will continue to become better and better.

Aeropostale has just released their new expected EPS is lower than analyst expectations. In the short-term I am expecting a move down.

In the long-term, I have valued this company to be at around $22.00. Technically speaking, I believe they can make that as long as they pass this $17 resistance level.

I wrote a whole report about them: Check it out!
http://fundamental-stockanalysis.blogspot.com/

Click the link on the Aeropostale investment analysis

Looking at the 2Y History, it looks like ARO is having a pretty steady climb upward for a good kick start to the new year.

because my kids like the clothes

Valuation, operational improvements

Will buy ARO and ANF anyday.

sentiment trader

Undervalued. $1.2 Billion Market Cap with $400M assets and ~$380M annual earnings.

Growing - Cheap copycat styles for kids/teens are only going to see growth in sales

Competitive Advantage? Not much other than price and ability to quickly mimic higher priced competitors

Management - Like the fact they are buying stock back at low levels.

I missed them at $9, but they are still way below where they could be. Cotton prices are on their way down, which should help the margin picture.

Steady management, very popular among teens, room for growth.

timing was everything on this one!

Solid company, will do well when consumers are looking for good clothes at low prices.

Caters to a high demand market that spends. Employees are typically members of the Aro target market--employees give (low) wages back to Aro in exchange for "Aro cool" high ROI clothing.

Fair Value = $20 ($17 conservative)
So only 30 to 50% return...thats all.
The only concern I have is competition.

Style and avalability

Sold earning and balance sheet

Contrarian pick.
Management aggressively buying shares.
No debt/73m cash
P/S=0.3, PEG=0.8 P/E=5

Bad:
Management gets paid 10% of net profit
Insider holding 2.63% (low for a small cap stock)

Looks crazy inexpensive. Slightly less appealing on a cash flow basis than on earnings basis. Time will tell.

See:
http://www.fool.com/investing/general/2011/09/21/4-ridiculously-cheap-contrarian-stocks.aspx

Also remember that looks can be deceiving...especially in fashion.

.33 P/S makes it a good turnaround candidate. Good numbers.