Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Chico's FAS
So what: An earnings miss in rarely good news, but investors are in a forgiving mood. Taking a "two-outta-three-ain't-bad" approach to the news, they're bidding Chico's shares up 10% in early trading today.
Now what: At 20 times earnings, Chico's shares now fetch a significant premium to those on the rack at rivals like Ascena Retail
That alone makes Chico's shares look like a bargain -- but what really gets me interested in the stock is the fact that the $166.6 million in free cash flow that Chico's generated last year exceeds reported net income by more than 44%. When you pair Chico's 17% growth rate with a price-to-free cash flow ratio of less than 14, I'd say Chico's shares aren't just fashionable today -- they're downright stylin'!
Want to learn more about this underfollowed, undervalued retailer? Add the stock to your Fool Watchlist.
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