Hedge Fund Trade of the Week: Aeropostale

Where’s the fast money finding opportunity? In this regular feature Anthony Scaramucci aka The Hedge reveals his latest greatest pick!

This week’s trade is longAeropostale, a mall-based, specialty retailer of casual apparel and accessories, principally targeting 14 to 17 year-olds; that’s according to the Aeropostale website.

Take a look at the chart and some of the company’s stats:

Aeropostale (ARO)
Sector: Services
Industry: Retail
Based in: New York, NY
Market Cap: $2.1 billion
52-week high: $32.24
52-week low: $21.26

Scaramucci selected this stock as his hedge fund trade of the week because he thinks it’s a value.

Aeropostale trades at a lower multiple than its peers. “JCrew just sold to a group of private equity buyers at something like 8 times EBITDA and this stock is trading at 4,” he says.

"It’s just a very cheap stock,” he adds.

Scaramucci also says it has “fantastic margins, a great return on equity, a great return on invested capital and great free cash flow yield.”

Also he thinks the stock may be oversold on the belief that teens will foresake this store for something more upscale such as Abercrombie & Fitch as the recovery takes hold, "but we're not seeing that."

And before the broadcast he told our producers that other top hedgies are in this name including George Soros, Ronald Muhlenkamp, and John Hussman.

Click here to check out other Hedge Fund Trade Of The Week posts

* Anthony Scaramucci runs SkyBridge Capital, a leading alternative asset manager with more than $7 billion under management. Every week on Fast Money, Scaramucci, aka 'The Hedge', takes you behind the hedges, giving you an unprecedented look at the names getting the most chatter amongst the hedge fund community.

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Trader disclosure: On January 5, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman's firm is long S&P puts; Finerman's firm is long Russell 2000 puts; Finerman owns (AAPL); Finerman owns (BAC); Finerman's firm owns (BBY); Finerman's firm owns shares of BMW; Finerman owns (BP); Finerman's firm owns (BP); Finerman's owns (GOOG); Finerman owns (HPQ); Finerman's firm owns (HPQ); Finerman's firm owns (IBM); Finerman owns (JPM) and (JPM) leaps; Finerman's firm owns (JPM) and (JPM) leaps; Finerman owns (MSFT); Finerman's firm owns (MSFT); Finerman's firm owns (WMT); Seymour owns (BX); Seymour owns (TSL); Seymour owns (VIP); Seymour owns (AA); Seymour owns (AAPL); Seymour owns (F); Seymour owns (FXI); Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (INTC); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU); Adami's wife works at (MRK); Terranova owns (GM); Terranova owns (C); Terranova owns (VRTS); Terranova owns (UPL); Terranova owns (PEP); Terranova owns (OXY); Terranova owns (GS); Terranova owns (SLW) puts; Terranova owns (GLD) puts; Terranova is short (SLV) futures

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