Out Fox The $treet

Recently, analyst firm Jefferies  listed several retail stocks as top leverage buyout, or LBO, candidates. Basically, the analysts think the stocks have gotten so cheap that private equity will take them private via borrowing debt to restructure and hopefully create value. Jefferies thinks that Aeropostale ( NYSE: ARO     ) , American Eagle Outfitters ( NYSE: AEO     ) , and Body Central  provide interesting values with high internal rate of return, or IRR, and limited debt. The only problem is that the teen retail segment has become highly competitive, with numerous players that can easily compete online with cloud software tools and social media advertising. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Small-Cap Insight After an extremely weak year, has Body Central ( BODY ) finally hit bottom? The women's fashion retailer started off with good results in 2011 after an IPO at the end of 2010. The company though constantly revised down expectations in 2012 while competitors such as Francesca's Holdings Corp ( FRAN ) managed to continue growing at a fast pace. The company is a multi-channel, specialty retailer of woman's fashion providing quality apparel at affordable prices. It operates 281 specialty apparel stores in 26 states under the Body Central and Body Shop banners. With the stock plunging from near $30 at the peak back in 2012 to the current price of $12.50, the question remains whether the company can regain that stock price. With a market cap of only $200 million, Body Central appears destined for a significantly higher market valuation with any type of turnaround. As a sign of the potential, Francesca's has a similar revenue base, but the...

Don't look now, but Body Central (BODY) appears to have hit bottom. After the huge plunge last Spring, the stock has spent the last 7-8 months flat lining. Now for the first time since a false attempt in September, the stock has moved above the 20/50EMAs. Have the fundamentals really changed? Analysts have cut the Q113 earnings estimates from $0.34 90 days ago to only $0.18 now. The stock is signaling a potential change in the air. With the 52-wk high at $30.93, BODY could be a sweet gainer if the turnaround is complete. Just not convinced it is in the bag yet. Disclaimer: No positions mentioned. Please review the disclaimer page for more details. 

In a sign of the extreme nature of this market, Body Central (BODY) has plunged 50% for the 2nd time in about 45 days. Amazingly the stock was trading above $30 as April was coming to an end and today it now trades for only $8.28. The company warned for the 2nd time that comp sales were exceptionally weak and earnings would disappoint. Just 60 days ago analysts expected $1.52 for 2012 and now the company forecasts $1.09. Truly a big disappointment but an over 70% cut to the stock seems irrational. The most shocking number from the below chart is that the CCI is sitting at a -602 for one of the lowest numbers ever posted. This number is even lower than the last warning back in early May. The RSI is also extremely weak sitting below 19. This though is about on line with the number from early May. Figure - BODY 8 Month Chart Unfortunately for investors the stock is likely to hang out in the $8-9 range similar to how it did last month in the $14-16 range. The stock might even...

Remaining an investor in Ulta Beauty (ULTA) has to be akin to playing Russian roulette. Prior to earnings the company was trading at nearly 28x next year's estimates of $3.14. No indications exist that Ulta will have a massive blowup similar to fellow retailers Fossil (FOSL) and Body Central (BODY) or any of the numerous stocks that plunged 20, 30, or even 40% during earnings. Of course, neither of those stocks showed signs of weak results ahead of plunges either. Considering Ulta trades at a lofty multiple, any whiff of disappointing numbers could result in a significant drop. Good Enough After the close on Tuesday, Ulta reported Q113 numbers that slightly exceeded estimates. Net sales hit $474.1M, which only slightly exceeded the $473M estimates. Earnings also beat by $.01. Read the full article at Seeking Alpha. Disclaimer. No positions mentioned. Please review the disclaimer page for more details. 

Last November's IPO, InvenSense (INVN) , had lived a charmed life during the roughly six months since its IPO. The stock started trading around $9 and eventually traded as high as $22 in March. For an IPO mostly missing the initial day hype, the after market results were spectacular. On Friday, InvenSense got a rude awakening to the realities of the public market. After reporting solid Q412 results, the company provided slightly lower revenue guidance for Q113. This led the stock to plunge 23% on Friday. The stock went from trading over $18 on Thursday to sub $13 on Friday. In what has been an earnings season of massive selloffs, InvenSense wasn't even the largest sell-off on Friday. Body Central (BODY) saw a 48% decline; previously Riverbed Technology (RVBD) saw a nearly 30% loss on similar warnings (see my article on the plunge of Riverbed Technology). In light of the size of these other sell-offs, maybe the fact that InvenSense was only down 23% can be seen as construc...