This retailer’s stock is trading near 52-week lows, yet analysts are forecasting 20% per annum growth for the next five years.
Ascena Retail Group, Inc. (ASNA)
From The Lancz Letter
Similar to this time last year, LanczGlobal recommends taking risk off the table into any strength after the U.S. elections, or into any year-end rallies. On the other side, we recommend buying select underperformers of 2016 into anticipated continued selling pressure from year-end tax loss selling.
We have added several new aggressive recommendations that investors can begin to accumulate into anticipated weakness. It is critical to align yourself with solid management teams that can take advantage of upcoming volatility. Continue to have the discipline to buy into negative sell-offs with those unexpected headlines, and take profits during bouts of euphoria when markets are touching on new highs. This challenging market environment will still provide opportunities, but there will be a lot of losers and disappointments for those chasing stocks, and yield, along the way.
Ascena Retail Group, Inc. (ASNA) is a retailer with a market cap of close to $1 billion. Its stock is trading at 7 year lows, trading nearly ½ of its current book value.
Last year the company acquired Ann Taylor Stores, and it has been a much more difficult integration process for the company than expected. Cost savings with the Ann Taylor integration should become more meaningful over the next 2-3 years and we would not be surprised to see the stock back in double digits within that time horizon.
LanczGlobal recommends purchase as the stock weakens in the $3-5 a share area with year-end tax-loss selling.
Alan B. Lancz, The Lancz Letter, www.lanczglobal.com, 419-536-5200, October 28, 2016