Scanning the retail headlines yesterday, I read that brokerage Cowen & Co. has resumed coverage on the following companies: Bed Bath & Beyond (NASDAQ:BBBY), Abercrombie & Fitch (NYSE:ANF), Tiffany (NYSE:TIF), Williams-Sonoma (NYSE:WSM), Ann Taylor (NYSE:ANN), and Men's Wearhouse (NYSE:MW). The brokerage has gave them all an "outperform" rating.

My first thought was, "That's cool. Another set of eyes looking at the data."

Then I read something that made my stomach turn a bit. The article also says that "the ongoing private equity speculation provides downside protection for the stocks."

Let me get this straight. The logic is that private equity speculation is a risk mitigation tool? Since when did speculation reduce risk?

I am sure there's more research than that behind the "outperform" ratings. So why not highlight what's happening to margins, returns, new store concepts, things like that? Why highlight private equity firms searching for places to put their excess capital, which, by the way, tends to drive prices up too high during times of "greed"? Prices that are ahead of fundamentals are very risky.

After thinking about this, my head hurts and my stomach is feeling a bit queasy. And I think the remedy is to look at how these companies are rated in our community-intelligence service, Motley Fool CAPS.

# of Outperforms

Rating (out of five stars)

Abercrombie

278

***

Ann Taylor

47

**

Bed Bath & Beyond

367

***

Men's Wearhouse

54

***

Tiffany

75

***

Williams-Sonoma

62

**

For the most part, the CAPS community seems to agree that these companies deserve "outperform" ratings. Investors aren't as cheerful with Ann Taylor and Williams-Sonoma (a two-star rating implies below-average enthusiasm), but dissent is what makes community intelligence valuable.

More importantly, scanning the write-ups investors made to accompany their CAPS ratings, I did not see one mention of the words "private equity" in their theses. Thank goodness! My stomach feels a whole lot better.

I've written about this private equity madness before, and I think that focusing on it as risk mitigation for investors is yet another data point to show it's probably getting out of hand. So, Fools, keep focusing on the fundamentals of a business and keep communicating that fundamentals matter. The fact that private equity investors may be willing to pay high prices doesn't provide a safety net, and I certainly wouldn't want to rely on them to bail me out of an investment.

For more on these retailers, check out:

Bed Bath & Beyond is a recommendation of both Stock Advisor and Inside Value -- and I know that Tom Gardner and Philip Durell did not focus on private equity in their recommendations. You can take a 30-day free trial of both to learn the real reasons.

Retail editor David Meier is ranked 791 out of 17,966 in CAPS and does not own shares in any of the companies mentioned. You can view his TMF profile here. The Fool takes its disclosure policy very seriously.