When we initiated coverage on Ascena Retail Group (NASDAQ:ASNA) we told you plainly that the stock was to be avoided. We have been watching the name for over a year but are of the opinion that despite the company actually having an impressive portfolio as a leading specialty retailer offering clothing, shoes and accessories, it is a dead money stock. Despite the amazing brands in this company’s portfolio, like Lane Bryant and Maurice’s, the company just has not delivered. As we believe this stock is dead money here, we are urging our readers not to chase the stock lower.
It is dead money
Although we are rooting for the company, performance is what matters. Investors, namely those looking for a speculative buy or chasing a mean reversion, could be tempted to dive into this dead money stock which looks to test new lows
Let us be clear. Investors have lost bundles chasing this stock down every point over the last few years. Do not gamble here.
The company is facing ever increasing competition from similar retailers, big box stores and, of course, e-commerce. It will take a meaningful turnaround in operations for the stock to get moving again.
While we realize people are going to chase this for a dead-cat bounce, we urge investors to steer clear. The stock has been a terrible performer after all of our sell calls and looks to be falling back under $2 a share. There are so many…..CLICK TO FINISH ARTICLE
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