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

Chico's FAS: I'm Buying This Dip

Executive summary:

  1. CHS had a 10% sell-off after weak Q4 results, but I believe that this sell-off was overblown, as it looks like the company has already fixed its assortment issues.
  2. Over the next 12 months, I believe that estimates for 2015 will improve and that we will see the stock move to the $20 price level.
  3. Longer term, CHS provides a very compelling growth story, grounded on the emergence of new brands, international expansion, and returns of capital to shareholders, yet it currently trades at a slow growth multiple.

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Chico's FAS (NYSE:CHS) reported weak results and lower-than-expected guidance for 2014 last week, which sent shares down 10%. After reviewing the results, I think this move was...

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