4-Star Stocks Poised to Pop: Guess?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, apparel retailer Guess? (NYS: GES) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Guess?'s business and see what CAPS investors are saying about the stock right now.

Guess? facts

Headquarters (Founded)

Los Angeles (1981)

Market Cap

$2.8 billion

Industry

Apparel retail

Trailing-12-Month Revenue

$2.64 billion

Management

CEO Paul Marciano (since 2007)

CFO Dennis Secor (since 2006)

Return on Equity (Average, Past 3 Years)

25.7%

Cash/Debt

$430.2 million / $15.1 million

Dividend Yield

2.6%

Competitors

Abercrombie & Fitch (NYS: ANF)

Gap (NYS: GPS)

Ralph Lauren (NYS: RL)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 91% of the 682 members who have rated Guess? believe the stock will outperform the S&P 500 going forward. These bulls include doctorfool1 and jed71.

This past summer, doctorfool1 tapped Guess? as a clear bargain opportunity: "Obviously a well run company with heavy insider ownership and a history of growing earnings and shareholder returns. Oversold now ... Easy buy for me."

In fact, Guess? currently sports a cheapish forward P/E of 8.0. That represents a discount to competitors like Abercrombie (14.5), Gap (10.3), and Ralph Lauren (18.4).

CAPS member jed71 elaborates on the Guess? bull case:

So far, so good. Looking at their numbers, they actually look pretty darn good. Free Cash Flow and cash on the balance sheet ($430MM) seem extremely strong going into the holiday season. Gross and operating margins also seem quite good given the nature of their business. I think they are in for a short term bump to maybe the $35 range.

What do you think about Guess?, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackGuess?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Guess? and Gap. Motley Fool newsletter services have recommended writing covered calls in Guess?. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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