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April 10, 2007

The Gap: Risky, but its a buy!

Gap Inc. (GPS)
The market is up more one reason: Takeovers. Gap is the parent company of Bannana Republic, The Gap, and Old Navy Stores. The company has been struggling recently because of laggin same stores sales. Their main source of revenue, the gap has also seen lower margins as well as lower revenue simply because of their lack of stylish designers. Their clothes were quoted as just being "not stylish, just nothing different from what we're seeing in all the other stores." The individual parts of this company are great brands, they're nationally recognized and have a history of reliability. With the recent boom in takeovers and LBO, the GAP as a company or any of its parts is a great target. By having different companies manage each store instead of the parent company managing 3 different stores will give way for efficiecies, cost cutting, new styles and better marketing. Management wants a buyout and so do the shareholders.

Pros:
• Amazing takeover target
• A great and recognized brand
• Good parent company, even better independent stores
• Recent boom in LBO and takeovers

Cons:
o Their management is just not great
o Negative sentiment on the street
o the government




To find out more information on GPS visit the websites below, you will also be able to track the companies stock price and recent upgrades and downgrades:

Stock Price and Key Statistics.

Copyright © Eric Medina




Posted by eamed at April 10, 2007 09:36 AM

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