Gap: With Positive Comp Sales, This Is A Great Dip To Buy

Gary Alexander
31.21K Followers

Summary

  • I see Gap as a compelling value buy after its recent dip, with a low P/E and strong balance sheet supporting my bullish stance.
  • Gap's core brands are showing solid comparable sales growth, especially Old Navy and Gap, despite macroeconomic headwinds and weak guidance for Q2.
  • The company's healthy net cash position and increased dividend yield (~3.2%) make it attractive for income-focused investors.
  • While Athleta and Banana Republic face challenges, their limited revenue share reduces risk, and Gap's fundamentals remain robust for long-term gains.

Gap store exterior, Oxford Street, London

VV Shots

To me, with the S&P 500 retreating from highs near 6,000 on the slightest provocation, stocks appear very vulnerable with investors' recent flight into the safety of bonds. In my view, this is an expression of elevated valuations more than anything else, and

This article was written by

31.21K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of GAP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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