5 Stocks to Buy According to James Mitarotonda’s Barington Capital

4. Chico’s FAS, Inc. (NYSE:CHS)

Mitarotonda’s Stake Value: $12,084,000

Percentage of Mitarotonda’s 13F Portfolio: 11.27%

Number of Hedge Fund Holders: 22

The fourth stock on our list of the top 5 stocks to buy according to James Mitarotonda’s Barington Capital is Chico’s FAS, Inc. (NYSE:CHS), which is a Florida-based retailer of women’s clothing and accessories. The four stores owned and operated by  Chico’s FAS, Inc. (NYSE:CHS) include Chico’s Store, White House Black Market, Soma, and TellTale. The company has brick and mortar stores across the United States and Canada, and is serving customers online, benefitting from the e-commerce boom.  Chico’s FAS, Inc. (NYSE:CHS) is traded as a S&P 600 component. 

Mitarotonda’s Barington Capital owns 1.83 million shares worth $12.08 million in  Chico’s FAS, Inc. (NYSE:CHS). This stock makes up 11.27% of Mitarotonda’s 13F portfolio. 

Out of the elite hedge funds tracked by Insider Monkey, 22 had stakes in  Chico’s FAS, Inc. (NYSE:CHS), equaling $177.6 million. The biggest stakeholder in the company is Jim Simons’ Renaissance Technologies, owning stakes worth $45.5 million in the clothing retailer. 

In the Q2 2021 investor letter of Miller Value Partners, the fund mentioned Chico’s FAS, Inc. (NYSE: CHS) and discussed the exceptional performance of the firm in Q1. Here is what they said:

“Chico’s FAS (CHS) was the top contributor over the quarter, advancing 98.8% in conjunction with the vaccine rollout accelerating apparel demand and strong Q1 results. Chico’s reported Q1 net sales of $388M, +37% above consensus and +38.4% year-over-year (Y/Y) driven by +65% growth at Soma and a +13.4% rise in digital. Gross margin rose to 32.7% on improved leverage of occupancy costs and leaner inventory driving significantly higher full-price selling. For Fiscal Year 2021 (FY21), management expects consolidated net sales improvement of 28%-34%, gross margin improvement of 18-20 percentage points, and Selling, General & Administrative expense (SG&A) rate improvement of 500-600 basis points (bps). Guidance at the midpoint implies revenue of $1.73Bn and gross margins of 32.9%, +7% and +180bps above consensus, respectively. Additionally, activist shareholder Barrington Capital issued a letter to the company, calling for a Board refresh and expanding the scope of financial disclosure in an attempt to unlock value of the rapidly growing Soma brand.”