Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty retailer Hot Topic
With that in mind, let's take a closer look at Hot Topic's business and see what CAPS investors are saying about the stock right now.
Hot Topic facts
|Headquarters (Founded)||City of Industry, Calif. (1988)|
|Market Cap||$355.7 million|
|Trailing-12-Month Revenue||$707.8 million|
CEO Lisa Harper (since March 2011)
CFO James McGinty (since February 2001)
|Return on Equity (Average, Past 3 Years)||1.2%|
|Cash/Debt||$72.55 million / $0|
Abercrombie & Fitch
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
A couple of months ago, PWorm tapped Hot Topic as a particularly unfashionable pick:
Fad clothes in a dying mall environment. "Hot Topic kids" are viewed as uncool. The company is losing money and it won't be long before it is forgotten.
In fact, Hot Topic sports a paltry three-year average operating margin of 1.3%. That's much lower than that of other teen apparel plays like Abercrombie (7.9%), Aeropostale
CAPS member TMFBiggles offers an angst-filled case against the stock:
A poem for Hot Topic, in the style of a typical Hot Topic customer:
Despair! My black, black soul.
Blacker than my vinyl knee-high boots, bought for $99.
The stock price is so high ...
It can only crash, like waves of angst upon my heart,
Which is also black,
A color Hot Topic's balance sheet so sorely needs.
Down! It shall crash! Crash down. Woe is me.
If only I could afford a pithy Spongebob T-shirt to express my woe,
But I am poor.
No one will hire me because of my woe, so I cannot spend much money
At Hot Topic any more.
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Interested in another easy way to track Hot Topic? Add it to your watchlist.