Perkins’ Picks

New York & Company Inc, (NWY) a STRONG BUY

Would you buy a company that was trading at $0.90 per share, well run by a smart CEO, had $250M in assets, $21M in debt, a strong retail brand, is down over 80% in the past year, and has a book value per share of $4.198? I would and you should too.

Unfortunately or in this case should I say fortunately, some times smaller companies when markets face difficult times get severely and unfairly beaten up. This has happened with NWY. NWY has a Market Capitalization (post sell-off) of $112 Million vs. Apple’s $82 Billion. Prior to the major downturn in the markets the company had no problem growing revenues, customer base and its balance sheet.

I have been recommending this stock the minute it crossed under $1 like crazy. I also have been predicting that the company would find value in its own shares and buy back their own stock.

The companies stock was up over 35% on last Friday.

Wouldn’t you know that the apparel retailer said late on last Wednesday that it would buy back as many as 3.75 million of its shares in the next 12 months. And it said that its majority shareholder has indicated that it also intends to buy as many as 3.75 million company shares. Share buy backs typically are a way for a management team to communicate confidence in their company. At Nov. 26, the company had 60 million shares outstanding. You should get some too.

The company’s stock was up over 35% on last Friday, and has much more to return.