3. Talbots (TLB) is a specialty retailer and direct marketer of women's apparel, accessories and shoes. Talbots swung to a fiscal second-quarter profit of $940,000, or 1 cent per share, from a loss of $24 million, or 38 cents, a year earlier. Revenue declined 1.3% to $301 million. The operating margin climbed from negative territory to positive 4%. Talbots holds $4.7 million of cash and $37 million of debt, translating to a debt-to-equity ratio of 0.2. Its stock sells for a forward earnings multiple of 11, a 28% discount to its peer average. The shares are expensive based on book value and cash flow. Lazard Capital Markets forecasts that the stock will gain 77% to $21.