Shaun Currie, CFA
Long/short equity, hedge fund analyst, momentum

The Real Takeover Candidate In Teen Retailing

There have been many articles stating that the teen retailers are prime targets for LBOs. I do believe this to be true considering the balance sheets and valuations, but I believe that Abercrombie & Fitch (NYSE:ANF) would be the most attractive LBO candidate of the teen retailers from a strategic perspective. Though Aeropostale (NYSE:ARO) is attractive because of its smaller size, I believe that its company-specific issues and issues related to fashion may end up being too much to get a private equity firm interested. American Eagle (NYSE:AEO) is on the soundest footing from an operations perspective, has less cost levers to pull, and trades at the highest EBITDA valuation.

On the other hand,...

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