Alyce is worried about Gap
I'm not alone here. Motley Fool Inside Value's Philip Durell and Motley Fool Stock Advisor's Tom Gardner have both recommended Gap to their subscribers. When two proven market-thumpers fall on the same side of the fence, I pay attention. Tom is clearly pretty excited about this space; five of his past seven recommendations have been retailers, including bebe stores
Is Gap perfect? No, but financially steady retailers like Gap can be afforded these blips. Whether it's the failed swimwear experiment at Old Navy or Gap's West Side Story ad fiasco, Gap will bounce back. Patient investors just happen to have a historically cheap price and a generous dividend to keep them company.
Alyce feels that an apparel company like True Religion
Gap is in the right place -- retail. It's there at the right time, as the improving economy is loading folks up with disposable income and shoppers are willing to spend more on clothes. Gap just doesn't know what to wear at the moment.
That's fine. Fickle fashion is a temporary problem that can be fixed with a sharp buying decision or two. The healthy net profit margins that Gap is still producing are comforting. Sorry, Alyce, I'll have to side with Philip and Tom on this one.
Longtime Fool contributor Rick Munarriz thinks that the company should combine its three non-Gap concepts into one -- Old Banana Towne. He doesn't own shares in any company mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.