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Pacific Sunwear Looking Cloudy

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In retail, Aeropostale and Gap are better fits.

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Asian stocks were mixed overnight. The Hang Seng closed down 0.09% and the Nikkei rose 0.81%. European stocks were in positive territory in early trading. And here in the US we're currently trading higher.

Here's what I'm focused on during this beautiful (every Friday is beautiful) morning:

Pacific Sunwear (PSUN):
The California-based retailer was out with its fourth-quarter numbers last night. The chain turned in an adjusted loss of $0.26. Analysts had been expecting a loss of $0.29. Meanwhile sales came in at $292.6 million. That was interesting because the Street was at $274.5 million. Meanwhile, in terms of outlook, the company indicated the following for the first quarter: "On a non-GAAP basis, using a normalized 37% effective income tax rate, the company would expect to show a net loss of $(0.32) to $(0.38) per share for the first quarter of fiscal 2010."

My feel on PacSun:

1. Although I think it has a good name/reputation and offers nice merchandise, from an investment perspective, it's hard to get too excited about its first-quarter outlook, or for that matter, the $0.47 a share loss that Wall Street is expecting for this year.

2. In a nutshell, why should I belly up here? What's the incentive, or what's the catalyst that should be inspiring me? If I wanted to take a dip into the apparel retail waters why wouldn't I go for Gap (GPS) or another company that's expected to post solid profits and seems to be on better footing?

3. On the flip side, though, I intend to stay tuned because if and when things do turn there could be a big pop here.

For my last take on Pacific Sunwear click here.

Aeropostale
(ARO):
The New York-based retailer was out with its fourth-quarter results after the bell last night. In case you missed it, the chain put up a profit of $0.99 in the period, and that was $0.04 better than expectations. It also pummeled the top-line estimate too. Topping off the sundae, the company also offered up a pretty swell outlook for the first quarter and full year.

My thoughts:

1. Clearly this was a good quarter and I expect that the numbers will generate a lot of chatter this morning.

2. Estimates have been moving up recently (which is a good thing) and I sense that they may keep inching up given management's upbeat outlook and the overall improved retail environment.

3. While I admit that I'm also smitten with Gap (GPS), it's hard to resist these guys, because at just under 11 times this year's estimate I suspect the shares could have some legs.

Goldman Sachs (GS):
Minyan Justin points out that Societe Generale slapped a Buy rating on the big name bank.

My feel:

I think the shares get a nice little goose on the heels of this news, and I have to say that I too am a bull on Goldman. But I'm more of a long-term bull. Keep in mind these guys have had a heck of a run over the last couple of months or so. In short, I wouldn't be surprised to see some of those gains consolidated once all of the hubbub dies down.

Bristol-Myers Squibb
(BMY):
The skinny is that Jefferies slapped a Hold rating on the drug company and I wanted to weigh in.

My two cents:

Okay, a Hold rating hardly gets me excited and I clearly don't think that investors will be climbing over each other to get into the stock based on this news alone. However, Bristol-Myers is a company that has a good deal of upside potential in the years to come and it deserves, at the very least, a passing look. To give credit where it's definitely due, it's taken out the estimates in two of the last three quarters and I'm seeing the 2011 estimates inching on up to boot. Not to mention that I've speculated for a while now that it could eventually combine with another drug company, which would certainly draw some attention to it. This is a mainstay on my radar screen.

Have a great day and an even better weekend!
No positions in stocks mentioned.

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