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When you think of Limited Brands (LTD), think of Victoria’s Secret and Bath & Body Works, two core components to the success of the retailer.

Limited Brands: $34.81 per share

On November 5th, we selected Limited Brands shares at $31.79 for our Premium Watch List. The performance since our selection is a 9.5% rise in the share price.

How did Limited Brands meet our Premium Watch List selection criteria?

Consistency of earnings. Consistency is an essential element when getting behind a company’s stock. Limited Brands has beaten earnings expectations over the past 4 quarters by at least 3.10%, and as much as 31.60%.

From a management standpoint, CEO Leslie Wexner is leading a lean corporate strategy of managing inventory and cost controls, while maintaining a fresh product mix in the world of beauty and fashion.

Not only were the fundamentals strong with an improving bottom and top line, but the technical price showed continued upside momentum ahead of the holiday shopping season (see chart below).

Why is Limited Brands hot right now?

This week, The Victoria’s Secret Fashion show aired on CBS and topped off a grand finale on the runway with their famed PINK brand catering to young women. The PINK brand has been a very catchy catalyst for Victoria’s Secret sales. Additionally, the continued buzz for the Twilight series is boding well for the signature Bath & Body Works themed product line.

Thursday, Limited Brands reported sales rose 10% in November at stores open at least one year. Analysts expected same-store sales to rise 4% (source: Thomson Reuters). In its most current quarterly earnings report, Limited Brands revenues rose 11.6% year-over-year. Any time a retail company issues a double-digit revenue increase, we see the climb as a positive strength signal for the shares. In November, Limited Brands said it would pay shareholders a special dividend of $3.00 per share on December 21st to shareholders of record on December 7th. The company also announced a new $200 million share repurchase program. In terms of brightening up their outlook, Limited Brands recently raised its full-year earnings forecast to a range of $1.82-$1.97 a share, from $1.68-$1.83.

Conclusion:

The bottom line is consumer retail has always been seasonal and trendy. With shares of LTD, the trend has been your friend. Limited Brands has taken the necessary steps to stay ahead of the retail demand curve.

Disclosure: Wall St. Cheat Sheet Premium Watchlist Pick on Nov. 5th.

Source: Limited Brands Stays Ahead of the Retail Demand Curve