The Gap Inc. (GPS), Limited Brands, Inc. (LTD): Your Cheatin’ Heart and Your Portfolio

Bebe Stores is a speculative small-cap name ($442.83 million) and only covered by four analysts but it does have a yield of 1.90%. The stock is down 4.94% over the last year and has a short interest of 11.80%. Nonetheless, it has a large insider hold of 59.52%.

The company operates 244 stores in the US, US Virgin Islands, Canada, Puerto Rico, and Japan and internationally licenses its bebe, 2b, and BEBE SPORT brands aimed at the 21-34 year old woman.

On June 27 the stock rose 6% on a positive Janney Capital Markets analyst note. Analyst predict a15.00 % five year EPS growth rate, same as The Gap. It is a volatile name but one to inspire some due diligence for a small flutter (Britspeak for tiny bet.)

Limited Brands, Inc. (NYSE:LTD), owner of Victoria's Secret, Pink, La Senza, Bath & Body Works, and Henri Bendel for over 3,300 stores worldwide as well as the much-admired catalogs and e-commerce sites. Limited Brands, Inc. (NYSE:LTD) offers the highest yield of these four names at 2.30% with a trailing P/E of 18.84 and a forward P/E of 14.03. The PEG stands at 1.55.

The company reported a 3% rise in same store sales in May and also reported Q1 net sales at $2.268 billion and EPS rose 17% from Q1 in 2012. The company has strong insider conviction with CEO and founder Leslie Wexner holding over 17 million shares.

It recently honored its Pink brand, the very popular line for collegiate age girls, to freestanding store status. Its Victoria Secret and Bath & Body Works command a dominant position in fragrance and lingerie.

Although the stock has underperformed the S&P 500 this last year it has been a five bagger since 2009. Over the last five years the dividend has grown by 64.92%.

Cheaters never prosper

But they do like to dress well and spend twice as much money doing it.

I like the yield and dividend growth at Limited Brands, Inc. (NYSE:LTD) best but Gap is making some progress with Piperlime and Athleta that bears watching. Ascena Retail needs to show improving earnings and accretion from Lane Bryant and Catherines. Bebe Stores is interesting as a speculative trade.

Caveat for the gentlemen: don't rifle through your lady's closet for these brands. Millions of women wear them because these are popular brands. That's why you want to buy the stocks. Trust your bride and buy her some roses and a Victoria's Secret gift card.

AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool recommends Ascena Retail Group (NASDAQ:ASNA).

The article Your Cheatin' Heart and Your Portfolio originally appeared on Fool.com and is written by AnnaLisa Kraft.

AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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