Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, teen apparel retailer Aeropostale (NYSE: ARO) has earned a respected four-star ranking.

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

Aeropostale facts

Headquarters (founded)

New York (1987)

Market Cap

$2.28 billion


Diversified chemicals

Trailing-12-Month Revenue

$2.36 billion


CEO Thomas Johnson

CFO Marc Miller

Return on Equity (average, past 3 years)



$239.46 million / $0


Abercrombie & Fitch (NYSE: ANF)

American Eagle Outfitters (NYSE: AEO)


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

On CAPS, 92% of the 812 members who have rated Aeropostale believe the stock will outperform the S&P 500 going forward. These bulls include bball2693 and All-Star XMFConnor, who is ranked in the top 10% of our community.

In January, bball2693 touched on Aeropostale's rock-solid fundamentals:

Strong brand name that is well established with their target market, and has been profitable for years. ... Margins are amongst the highest in the industry. Valuations are very cheap compared to its competitors. Analysts expect growth to continue at ~14%/yr for the next 5 years. Looking at a [discounted cash flow], fair value is at least 35.

Currently, Aeropostale even trades at a forward P/E of 10.3. That represents a discount to competitors Abercrombie (14.4), American Eagle (13.8), and Gap (11.8).

CAPS All-Star XMFConnor elaborates on the bull case:

This is my favorite pick for 2011. It is the cheapest teen retailer out there based on virtually any metric. It is trading at just 4X EBITDA ... for a business that consistently generates extremely high ROIC and positive same store sales (even during the recession), I find that price ridiculously cheap. This is a real money (and high conviction) pick for me.

What do you think about Aeropostale, 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!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Aeropostale. Try any of our Foolish newsletter services free for 30 days.

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