Womens clothing retailer Chico's FAS (CHS - Get Report) may draw private equity interest for a leveraged buyout at a premium to current share prices because of its debt-free balance sheet, strong free cash flows and niche retail market operations, which have the potential for expansion, according to Morningstar.
Chico's currently operates branded and designed private label clothing to women over the age of 35, while it's White House-Black Market brand of monochrome clothes appeals to a younger audience. In addition it runs a Soma lingerie line and acquired Boston Proper in Sept 2011.Because the company operates in the competitive consumer goods sector and may need additional capital to expand domestically and internationally, Morningstar sees Chico's as a strong private equity candidate. "With relatively conservative assumption,
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts