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Long

$LB Is A Speculative Buy

NYSE:LB   LIMITED BRANDS INC
It's hard to get overly bullish on $LB, but the chart has piqued our interest. The stock has very strong support at the $16 level and $LB looks to be on the verge of breaking out. With so many bearish on retail names, $LB could outperform quite easily with so many pessimists and shorts in the stock. With 8% of the float short, we could see a nice short covering rally.

$LB is also a deep value play. $LB trades at just 7.9x this year's earnings , .037x sales, and 12.12x FCF . With the stock down from 52-week highs near $30, there's a lot of room $LB can run.

While we wouldn't bet the farm on $LB, it looks to be a speculative buy at current levels.

As always, use protective stops and trade with caution.

Good luck to all!
Jan 10
Trade active: L Brands (LB +2.8%) moves higher just a day after reporting weak holiday sales, as Deutsche Bank analyst Tiffany Kanaga upgrades shares to Buy from Hold with a $24 price target, up from $22.

DB analyst Tiffany Kanaga thinks LB's holiday report, with Victoria's Secret reporting sales well below expectations, likely tips the scale "more toward a split, likely triggering strategic action in the near-term."

LB's "window of opportunity" for action is fairly limited, which creates a risk/reward that is now "skewed meaningfully to the upside," Kanaga contends.

In addition, Barington's standstill agreement expires next month and other activists could enter the fray ahead of LB's annual meeting, the analyst says.
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