is looking for undervalued stocks
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Finally an update.....
DressBarn wind down complete.
https://www.ascenaretail.com/investors/press-releases/
Yes, what you said is true.
I really just have an issue associated with the ethics perceived from the practice and the investment thesis of shorting stocks like ASNA.
I mean I witnessed on the Yahoo board, someone cheering for ASNA to fail... I mean who really does that? Who would cheer for 10's of Thousands of employees to lose their jobs?
It is frustrating how the practice of shorting can create a false sense of over supply without any real oversight or restriction. Just keep selling to push down stocks, and they continue to pile on.
My experience when you communicate with those bears/shorts with negative views of a stock, they really have virtually no knowledge of the fundamentals of said business. Like i have seen so many of them have say, ASNA was not worth more that $4.... But they provide zero explanation as to why other that just share price. Sometimes, I think they don't even know what market capitalization means.
From ASNA's perspective... When you take into account the Institutional and Insider holdings... There is litterally only like 1 Million Shares or less available. Yet we are trading an average of 200,000+ shares every day and continually pushed down.
I do not understand how anyone can still be willing to short this....
After you factor the Insider and Institional Ownership.... There appears to be less than 1 Million shares available. Maybe even less....
Where have all of these shares over the past few months come from...
Shorts are crazy...
Jugs would be wishful thinking. Would love to see another brand sale, that would wholly or nearly provide the cash to eliminate that debt that short/bears are so negative about.
Would love to see them burn.
Very frustrating to see the manipulation that goes on with only about 1 million shares that are not owned by institutions.
Sorry i post responses to you here Patrick, as I can't PM.
But I totally agree with you.
This is insane value here.
Decided to add more.....
Per the Ascena 10Q filed on 12/10/19
14. Equity
Common Stock Repurchase Program
In December 2015, the Company’s Board of Directors authorized a $200 million share repurchase program (the “2016 Stock Repurchase Program”). There were no repurchases of common stock by the Company during the three months ended November 2, 2019 and the remaining availability was approximately $181.4 million at November 2, 2019.
The entire market cap of Ascena Retail Group is $44 Million right now.
At end of last Quarter Ascena reported $261 Million in cash. When else would you get the unheard-of opportunity to reduce the O/S of a Fortune 500 company by potentially 25% or more for less than $10 Million. Heck Dress Barn was losing nearly $2 Million a week.
Per the Ascena 10Q filed on 12/10/19
14. Equity
Common Stock Repurchase Program
In December 2015, the Company’s Board of Directors authorized a $200 million share repurchase program (the “2016 Stock Repurchase Program”). There were no repurchases of common stock by the Company during the three months ended November 2, 2019 and the remaining availability was approximately $181.4 million at November 2, 2019.
The entire market cap of Ascena Retail Group is $44 Million right now.
At end of last Quarter Ascena reported $261 Million in cash. When else would you get the unheard-of opportunity to reduce the O/S of a Fortune 500 company be potentially 25% for less than $10 Million. Heck Dress Barn was losing nearly $2 Million a week.
I'm drafting an email to Ascena Management.
How does this sound.
Ascena Retail Team,
As of 11:00 AM 2/13/2020 Ascena Retail Group currently has a market cap of $44,476,106.
Based on fiscal 2019 revenues ASNA is currently trading at a Price/Sales ratio of 0.00810. Typically most websites don’t drill down beyond 2 decimal places. But because of the extreme depression in ASNA price, I went out to 5 decimal places to show you how ASNA is being perceived in the market.
If we took the average of the next lowest 5 peers and their P/S ratio’s (Stage Stores 0.0129, Stein Mart 0.03419, Francesca 0.05581, Tailored Brands 0.06221, Christopher & Banks 0.06459) we would get an average ratio of 0.04474. Applying that same ratio to ASNA would yield a $24.63 ASNA share price.
https://docs.google.com/spreadsheets/d/1vMlcfFTCfGTRBYH4MZoXu4sVxYfh4gj8iM_gnyN7E4M/edit?usp=sharing
Using another metric Enterprise Value/Sales with the average of Ascena’s 5 lowest valued peers out of 34. Using Yahoo Finance data that included “Total Debt” the Peer group average equals 0.45. Ascena using the same Yahoo data has an average of 0.39.. If we applied the average metric to ASNA would yield a $40.00 share price.
Why are you remaining silent and letting your “Stakeholders” that includes “Shareholders” get destroyed by a campaign of disinformation that is destroying this company’s value, including your own equity.
I would like to share with you a message that famed investor Dr. Michael Burry (The Big Short) wrote to the management team of Tailored Brands at the end of last year. Keep in mind that Tailored Brands currently has a market cap of $197 Million and has a similar debt load as Ascena Retail. TLRD has a P/S ratio of 0.0622 and a EV/S ratio of 0.72
https://www.businesswire.com/news/home/20190819005632/en/Scion-Asset-Management-Urges-Tailored-Brands-Repurchase
We reiterate that share buybacks are the most efficient manner in which to reward long-term shareholders when the share price is heavily discounted. The stock currently trades at an earnings yield greater than 20% and at a free cash flow yield much greater than that. A $50 million share buyback at the current 1994 vintage stock prices could retire about 20% of the outstanding shares.
https://www.bloomberg.com/press-releases/2019-08-20/scion-asset-management-urges-tailored-brands-to-repurchase-shares-with-sale-proceeds
We recommend the Board of Directors Prioritize a substantial buyback along with continued aggressive debt reduction.
Ascena’s market valuation is currently at levels reaching absurdity. All due to market sentiment, and much of which is due to lack of communication from management on progress and steps being taken in this turnaround. Shareholders are finding news on their own such as news of HQ’s being offered for sale, and trying to determine values ourselves to understand what returns Ascena may get.
You can not operate a public company with this kind of disregard to your investors
This is what Michael Burry sent to the board and management of Tailored Brands.
https://www.otcmarkets.com/filing/html?id=13622252&guid=G5mCUpJ1tsHCtth
"Share buybacks are simply a more efficient manner in which to reward long-term shareholders when the share price is heavily discounted. If management has confidence in Tailored as a going concern over the long-term, this is a simple decision.
We recommend the Board of Directors prioritize a substantial buyback along with continued aggressive debt reduction. The dividend should be eliminated or vastly reduced in order to facilitate these more urgent and timely allocations of capital."
Retail is not dead....
It is interesting to see this. Sycamore Partners is the company that made a $10 per share offer to buy Tailored Brands (TLRD).
I was thinking they could have been a potential suitor for one of the Ascena Brands....
But obviously retail is far from dead.
https://www.thestreet.com/investing/victorias-secret-could-fetch-up-to-3-4b-for-owner-l-brands
It is always a possibility Patrick.
It just makes no sense to me the choice of utter silence.
To not address and allow the negative sentiment and outright false claims by an agenda driven group to continue, and not defend your investors positions in the court of public opinion and let your companies value continue to deteriorate, is an extremely stupid decision. It alienates your investors that were supportive of you.
I don’t know where Muto is receiving his advice.
I can only hope he is continuing to take advantage of the discounted debt prices and purchasing devalued shares from the open market.
They have the unique opportunity to reduce the O/S of a company with $5 Billion in sales by 10% or more for less than $5 million.
Muto has a fiduciary duty to his shareholders too. We are also stakeholders. Right now, his annual compensation that has averaged about 10% of today’s market cap is not justified.
Did not expect ASNA to be down this much after the R/S....
The shorts have certainly done a number on my account value. ASNA is incredibly undervalued by all metrics, but if the company doesn't start talking soon, and doing "Something" to combat this campaign of dissinformation against them, I don't know how much longer I can lose my capital.
This has been painful to watch.
What is more painful, is knowing that there is justification that ASNA could easily be a $25 stock or more.
But here we sit at just above $4.
$ASNA Ran the numbers again. You shorts missed $6 drop in BOOT from last Friday. As I said, some of those higher valued retailers have metric multiples that are beyond obscene, but you keep messing with one that could royally burn you at any given moment.
https://docs.google.com/spreadsheets/d/1vMlcfFTCfGTRBYH4MZoXu4sVxYfh4gj8iM_gnyN7E4M/edit?usp=sharing
ASNA yet again is crazy cheap by all the metrics applied to all of the retailers on this list. Other retailers are in far worse condition and many do not have the options available to them that $ASNA has available to it.
At today's close ASNA has an Enterprise Value/Sales ratio of 0.39. The average of the next 5 lowest peers EV/S ratio is 0.45. Because of ASNA's crazy low share structure by applying the same ratio of 0.45 to ASNA would yield a $40 share price.
At today's close ASNA has a Price/Sales ratio of 0.008. The average of the next 5 lowest peers P/S ratio is 0.047. Applying the same ratio to ASNA would yield a $25.61 share price.
ASNA should today be between $25 - $40
Can't wait to see shorts get burned here.
I meant to also add that Stein Mart was just announced last week that they were being acquired at $.90 per share.
That acquisition is at a 0.49 EV/S valuation.
That same EV/S value of 0.49 would give ASNA a price of $60.00
Feel like I'm preaching to the choir.
$ASNA I still believe the current market value of the company is absurdly low...
https://docs.google.com/spreadsheets/d/1vMlcfFTCfGTRBYH4MZoXu4sVxYfh4gj8iM_gnyN7E4M/edit?usp=sharing
If comparing Enterprise Value/Sales to Ascena's 5 lowest peers, the Average of EV/S value of Cato Corp, Stage Stores, Christopher & Banks, Stein Mart, and Citi Trends (CATO, SSI, CBKC, SMRT, CTRN) is 0.44. Stein Mart as an example is 0.49
Stein Mart was in much worse financial shape with only $12 Million cash remaining and a total debt/sales percentage of 46.24% in comparison to ASNA's total debt to sales of 42.81%
ASNA currently has an EV/S value of 0.39. If applying a 0.44 EV/S value to Ascena we would have a $35 ASNA share price.
Similary if using the 5 lowest peers P/S ratio of Stage Stores, Stein Mart, Christopher & Banks, Francesca's, and Tailored Brands (SSI, SMRT, CBKC, FRAN, TLRD) the average P/S ratio is 0.045.
ASNA currently has a prices to Sales Ratio of 0.008. If applying the a P/S ratio of 0.045 to ASNA we would have a $24.93 share price.
Stein Mart is in far worse financial condition than Ascena Retail Group (ASNA). SteinMart was just announced to be acquired by a private investment firm.
https://www.globenewswire.com/news-release/2020/01/31/1978183/0/en/Stein-Mart-Enters-into-Transaction-to-Become-a-Private-Company.html
Just a quick look at Data from Yahoo Finance. Stein Mart had very little cash left at end of last Qtr only $12 Million.Stein Mart had/has "Total Debt" of $573 Million.
Yahoo's "Total Debt" number includes leases.
A comparison of Total Debt/Sales ratio for both ASNA and SMRT:
SMRT - Total Debt/Sales Ratio is 46.24%
ASNA - Total Debt/Sales Ratio is 42.81%
At $.90 Stein Mart is being acquired at a Enterprise Value/Sales ratio of 0.49
Ascena is currently sitting at an EV/S ratio of 0.39
$60.00 a share would give ASNA the same EV/S ratio of 0.49 as SteinMart
Thanks for the PM's Patrick...
I just added 500 shares at $4.70.
I'm not sure who is the culprit of the excessive downward pressure.
It is certainly nausiating to watch.
I did not expect it to be here. Short/Bears are acting like the company is dead.
They still have 7 brands under the umbrella, 3 of which generate over $1 Billion in revenue each.
The term loan isn't even due until August 2022. 2yrs 7 months from now. Ascena is looking at debt reduction options. Potentially a sale of Lane Bryant and or Justice, would have an enormous impact on the debt. At the end of the last Qtr they still had $260 Million in Cash. Like $600 Million in Liquidity.
This is insane.
$ASNA This is obscene.... No matter what metric is used.... P/S or EV/S if ASNA were valued closer to its lowest Peers ASNA would be between $31.00 and $40.00
It is like shorts are focused on the destruction of all value at Ascena at all costs.
At $5.15 the P/S ratio is 0.009 The lowest in the entire industry segment.
Stein Mart is the next lowest at 0.026. Just to match Stein Mart's 0.026 P/S ratio Ascena would be valued at $15 per share.
J Jill and it's 280 stores, and Total Debt/Sales Ratio of 70.15% and $54 Million Market Cap, is now worth more than Ascena's 2800 stores, Total Debt/Sales Ratio of 42.81%, and Market Cap of $51 Million.
This is sheer absurdity.
Sheesh.....
$ASNA I am shocked at what shorts/bears continue to do to ASNA. When there are other apparel retailers that are bordering on absurdity at the level of their P/E and P/S ratios. Like LULU with a 40.72 and 7.905 P/E and P/S ratio respectively. Or Five Below with a 33.83 and 3.756 P/E and P/S ratio respectively.
But no their laser focus is directed at ASNA even though there are other retailers in far worse shape and far fewer options.
Again, if we take the average of the next 5 lowest peers P/S ratio it is 0.057. Nearly 6 times what ASNA closed at today. (SMRT, FRAN, CBKC, SSI, TLRD) Applying that average, of just the next lowest 5 would put ASNA at a share price of $31.36.
The average P/S ratio of the next lowest 11 is 0.188. Applying that to ASNA would be a share price of $103.24
Shorts are being ridiculous.
https://docs.google.com/spreadsheets/d/1vMlcfFTCfGTRBYH4MZoXu4sVxYfh4gj8iM_gnyN7E4M/edit?usp=sharing
$ASNA Wow it is undervalued
Ascena has an existing $180 million stock repurchase plan in place.
I hope they are taking advantage
Should not fall on shareholders to address this campaign of disinformation.
Management is just letting it happen.
As much as I believe this is severly undervalued in comparison to the other retailers.....
It is becoming extremely difficult to watch my capital depreciate to these levels. My cost basis is $7.64 post split.
I wish the company would communicate operational progress to stop this capitulation that is occurring.
Damn....
I did not anticipate this absurdity...
Hard to stomach..
I so badly want Ascena management to burn these shorts.
That is great. So no anticipated big write down. We really may have a $5 earnings quarter or more.
That will send some people running for the exits.
I want to go back and look, but if I can remember correctly I think Ascena took most of the non cash related write downs in 2019 related to DressBarn.
I don’t think there will be a massive write down on the earnings report, that the shortbus bears can use as a negative talking point.
I think it’s blue sky’s after 2019 financials were done, but thought I would ask before I go back and review.
Nice to see some bulls trying to take back control of this thing.
I look at the financials of this, and I think everyone selling has to be nuts.
$ASNA - Fortune500 Company $75 Million Market Cap @ $7.65 per share most oversold Fortune 500 apparel retailer. 9,970,000 O/S, $75 Million Market Cap, 0.01 Price to Sales Ratio, $5 Billion in Annual Sales, $260 Million in cash position, $26.37 Cash per share. Parent company of Ann Taylor, LOFT, Lane Bryant, and Justice
$ASNA I have added 32 comparable peers to this spreadsheet. ASNA is the most oversold retail apparel company in the entire sector. So oversold, that ASNA's Price to Sales Ratio is currently a measly 0.01
The Next lowest Price to Sales ratio is Stein Mart. Stein Mart currently is trading at a P/S ratio of 0.03... If ASNA was trading at the same comparable P/S ratio, ASNA would be at $16.52. The average of the 5 lowest peers (Stein Mart, Tailored Brands, Christopher & Banks, Francesca's, and Stage Stores) and their price to sales ratio's is 0.08. If ASNA were minimally priced at these peers average P/S Ratio ASNA would be $42.20 per share.
ASNA is in better shape than half these companies financially on this list.
https://docs.google.com/spreadsheets/d/1vMlcfFTCfGTRBYH4MZoXu4sVxYfh4gj8iM_gnyN7E4M/edit?usp=sharing
Just for giggles, check out line 74 using the more similarly sized revenue companies and their 0.42 average P/S ratio does to the ASNA share price.
Happy New Year!
$ASNA @ $7.80 the most undervalued Retail Stock
Using the metrics of P/E and P/S ratio's in comparison to 29 other similar retailers. This spreadsheet depicts the deep value available to ASNA shares.
All company data was pulled from yahoo finance.
Using all peers metric values applied to a value of ASNA, ASNA should be trading at a minimum of $39.90.
Using the 5 lowest peers P/E and P/S metrics. ASNA should be between $25.54 and $50.10.
There is currently a 3-6 X's multiple potential in ASNA.
https://docs.google.com/spreadsheets/d/1vMlcfFTCfGTRBYH4MZoXu4sVxYfh4gj8iM_gnyN7E4M/edit?usp=sharing
$ASNA @ $7.80 the most undervalued stock in Retail Apparel.
Using the metrics of P/E and P/S ratio's in comparison to 29 other similar retailers. This spreadsheet depicts the deep value available to ASNA shares.
All company data was pulled from yahoo finance.
Using all peers metric values applied to a value of ASNA, ASNA should be trading at a minimum of $39.90.
Using the 5 lowest peers P/E and P/S metrics. ASNA should be between $25.54 and $50.10.
There is currently a 3-6 X's multiple potential in ASNA.
https://docs.google.com/spreadsheets/d/1vMlcfFTCfGTRBYH4MZoXu4sVxYfh4gj8iM_gnyN7E4M/edit?usp=sharing
A mere change in current P/S ratio of 0.01 to only 0.05 which is still lower than every other apparel retailer listed would still give ASNA a share price of $27.53 and a more in line market cap of $274 Million.
https://docs.google.com/spreadsheets/d/1vMlcfFTCfGTRBYH4MZoXu4sVxYfh4gj8iM_gnyN7E4M/edit?usp=sharing
$ASNA I have added 27 public retail apparel peers according to yahoo finance to this spreadsheet. All financial data for all companies was pulled from Yahoo finance. If ASNA were correctly valued by either P/E Ratio or P/S Ratio, there is room for a 3.5-6 X's multiple from ASNA's current price. ASNA's market cap currently is sheer market insanity. Again for ASNA's EPS, I used only what they posted for 1st Qtr 2020 that was posted on filing on 12/10/2019 of $3.20 per share ($0.16 Pre Split). Annualized if they continue with this turnaround that would be $12.80. But I used only the $3.20 number from 1st Qtr.
Using the lowest 5 comparable peers a P/E ratio of 9.25 would give ASNA a share price of $29.61. (ASNA currently P/E ratio based on $3.20 is 0.63)
Using the lowest 5 comparable peers a P/S ratio of 0.19 (Current 0.01) would give ASNA a price of $105.45. The same price it was at in comparison just slightly over a year ago with split price factored in.
https://docs.google.com/spreadsheets/d/1vMlcfFTCfGTRBYH4MZoXu4sVxYfh4gj8iM_gnyN7E4M/edit?usp=sharing
Dang where is that like button.....
Congress absolutely needs to revert our immigration numbers to much lower figures from the early 20th century.
This is extremely compelling.
Wish there was a like button.