Ascena Retail Group Inc fka ASNAQ

[RyGuy]

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