This might be crazy talk – but I am actually looking at the GAP for an investment – if it can just stop going down! Morningstar lowered their fair value estimate to $45.00 per share yesterday, but it is trading under $27.00? Looks like a compelling value, and even has a decent dividend. But, I must ask for the 11th time, does anybody shop there anymore? I know my kids get clothes from Old Navy (which they own along with Banana Republic), but their President just left to become CEO of Ralph Lauren. I will be taking a look at their options today.
| Name | Ticker | Price | Fair Value | Margin of Safety | Yield % | MOS % |
| Gap Inc | GPS | $26.95 | $45.00 | $18.05 | 3.39 | 40.11% |
Based on the following screen:
- 52 Week Low Screen:
- Morningstar analysis available.
- Less than 5% above its 52 week low.
- Greater than or equal to Narrow moat.
- Free cash flow/enterprise value greater than 5% (should be above what the 10 Year Treasury Bond is yielding).
- Financial Health Grade >= B.
- Forward P/E <= 20.
- Stock Industry not = Asset Management
- Dividend Yield % >= 2.5
- For candidates that have passed all the filters, review the individual stocks Return on Invested Capital (ROIC) for the previous 10 years to select the best long term candidates.
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