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2-Star Stocks Poised to Plunge: bebe stores?

Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, women's apparel retailer bebe stores (Nasdaq: BEBE  ) has received a distressing two-star ranking. While one-star stocks have been the worst performers, our data has shown that two-star stocks still lag the market by a significant margin and should be approached with caution; conversely, highly rated stocks have outperformed the S&P.

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

bebe facts

Headquarters (Founded)

Brisbane, Calif. (1976)

Market Cap

$518.9 Million

Industry

Apparel Retail

Trailing-12-Month Revenue

$689.8 Million

Management

Founder/CEO (Newly Appointed) Manny Mashouf

COO/CFO Walter Parks

Net Income Growth (Average, Past Five Years and TTM)

31.5% and (18.4%)

Competitors

Guess? (NYSE: GES  )

Wet Seal (Nasdaq: WTSLA  )

CAPS Members Bearish on BEBE Also Bearish on:

Dillard's (NYSE: DDS  )

Yahoo! (Nasdaq: YHOO  )

CAPS Members Bullish on BEBE Also Bullish on:

Apple (Nasdaq: AAPL  )

Bank of America (NYSE: BAC  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 48 of the 154 All-Star members who have rated bebe -- 32% -- believe the stock will underperform the S&P 500 going forward. Among the bearish population are philippalmer and CAPS All-Star TSIF.

Two days ago, philippalmer predicted that bebe "will struggle the rest of the year." Our member continues: "Now that they reduced earnings outlook and management is being shaken-up, I look for further declines."

In a pitch from the same day, TSIF follows that bearish line of thinking and writes:

[bebe] has a good reputation in [its] market, but the CEO resigning this week, difficult market and insider selling has raised a small flag. Cash flow doesn't look too bad for this market and they have no debt. I do not believe they are high risk, but I don't think they are going up anytime soon. I will have to review them the next few quarters.

What do you think about bebe, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 125,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Apple is a Motley Fool Stock Advisor pick. Bank of America is a choice of Income Investor. The Fool's disclosure policy always gets a perfect score.


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Related Tickers

2/14/2012 4:00 PM
BEBE $9.07 Up +0.07 +0.78%
Bebe CAPS Rating: *
GES $34.16 Up +0.17 +0.50%
Guess?, Inc. CAPS Rating: ****
WTSLA $3.57 Up +0.22 +6.57%
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YHOO $15.37 Down -0.76 -4.68%
Yahoo! CAPS Rating: **
AAPL $509.46 Up +6.86 +1.36%
Apple CAPS Rating: ***
BAC $7.98 Down -0.27 -3.27%
Bank of America Co… CAPS Rating: ***
DDS $48.32 Down -0.63 -1.29%
Dillard's, Inc. CAPS Rating: *

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