Ann Taylor Stores (ANN)


Hello, Michael! Maybe some of your more fundamentally oriented contacts would like the opportunity to explain this: Last Friday, before the market opened, Ann Taylor Stores (ANN) announced that quarterly earnings had beaten the year-earlier by 29%. Sounds to me like a good fundamental story. This was above the analyst consensus expectation, which is usually good for a gap up. Yet, on Friday, almost 8% of ANN’s market capitalization was wiped out because management made a remark that the coming year was expected to be flat. News organizations reported that investors were “disappointed” by this remark and that explained the drop. Are management comments “fundamental”? Are they more fundamental than the hard numbers? It seems to me that fundamental traders who are in love with a stock can always find some justification for buying it, and if a fundamental trader wants to dump it, he can find a fundamental story somewhere to justify the sell order. Thank you for letting me rant. Regards, Chuck