Billionaire Steve Cohen’s SAC Up To 5.3% of Ann Inc

We would compare Ann to Fifth & Pacific Companies Inc (NYSE:FNP), Chico’s FAS, Inc. (NYSE:CHS), Macy’s, Inc. (NYSE:M), and Limited Brands, Inc. (NYSE:LTD). We see most of these peers trading at premiums to Ann’s stock on an earnings basis. In the cases of Chico’s and Limited Brands the gap is quite narrow, with those two companies posting trailing earnings multiples in the 16-17 range. With analysts expecting growth over the next couple years, forward P/Es are closer to 12 or 13. Both reported double-digit earnings growth rates in their most recent fiscal quarter versus a year earlier; it’s possible that they are good values or even better values than Ann. Macy’s carries a trailing P/E of 13, but the department store has been struggling in terms of business performance and net income has actually been down when we look at its last quarter. Fifth & Pacific is unprofitable on a trailing basis, having just broken into the black in the fourth quarter of 2012. Its sales have been up at a similar rate to many of these peers, but the valuation is high in terms of earnings and so we would avoid it.

Ann and some similar companies seem well priced in terms of their trailing earnings, and recent results have been good (including the recent quarterly report from Ann itself, though its earnings did lag those of companies like Chico’s and Limited). Those three companies could be good targets for further research.

Disclosure: I own no shares of any stocks mentioned in this article.