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. 

The secular decline of the PC market should make any investor question why Dell ( DELL ) should obtain a premium valuation to the LBO offer of $13.65. The company has limited traction in the mobile sectors of smartphones and tablets, suggesting the business is only getting worse, not better. The stock should've been hammered Friday on the report by David Faber on CNBC suggesting the operating income forecasts used to value the LBO will be cut. The stock though actually rose for the day to close at $14.31 and above the offer. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Not something we'd usually comment on, but the option volume sure suggests something is in the works. TEX closed at $28.18 which is close to a 52 week high. The spectacular number today is the 15K options traded for May with a large volume in the 30s. This does give some credance to the rumors of management taking them private via a LBO. TEX has been rumored of a buyout for a while now. They've cleaned up their business via some divestures that has really solidified the balance sheet. The stock trades nearly 70% below its 2007 high and management expects earnings of $6 in 2013. Means making $7-8/share is the likely internal goal. Why wouldn't you want to take it private if the market will let you? Not a huge fan of buyouts, but I'm not one to turn down free money today instead of waiting 12 months for it either. Not being an insider we aren't privy to all the news nor can we affect the outcomes. If TEX wants to offer shareholders $40 this week, I'd gladly take ...