The Gap Inc. (GPS): If Urban Outfitters, Inc. (URBN) Misses, Look for Shares on Sale

Dip it
If the company were to miss estimates, and fail to give investors and analysts the short-term good news they demand, the stock could be ripe to fall. If that’s the case, the stock could become a buy in the mid-$30s.

Famed investor Joel Greenblatt loves retail stocks because they seem to get punished more than other sectors, and you have a constant flow of information to digest. He believes that a good retailer and merchandise picker, over the long term, is a great bet, and that short-term retailing trends don’t really matter. If that’s the case, investors may get a chance to pick up Urban’s stock while it’s on sale. As a taste-maker and trendsetter, Urban Outfitters resonates well with a young demographic, and its other brands are gaining traction with slightly older, more sophisticated, cash-laden shoppers.

Greenblatt’s firm increased its position in Urban Outfitters, Inc. (NASDAQ:URBN) by nearly 60% back in June.

The bottom line is: An earnings miss for the company could trigger a short-term sell-off, and if it does, it just might be time to go shopping.

The article If Urban Misses, Look for Shares on Sale originally appeared on Fool.com and is written by Michael Lewis.

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool recommends Urban Outfitters.

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