rue21 (RUE) was the 4th company in our annual stock selection countdown during late December 2012. RUE is a specialty retailer of private label apparel and accessories. The company offers an assortment of fashion merchandise at value prices, primarily catering to the teenage demographic. Products offered include graphic t-shirts, denim, dresses, belts, jewelry, handbags, footwear and intimate apparel.
The company was selected by Pittsburgh’s own Nick Stratigos during the February 2012 edition of our monthly Round Table. Nick is the reigning individual stock picking champion for our annual Groundhog Challenge and RUE has delivered a +3.4% relative return (vs. Wilshire 5000) since the time of selection.
With a sales growth forecast of 13%, net margin estimated at 4.9% and a projected average P/E of 18x, the return forecast is approximately 16%. RUE has a quality rating of 70.6 (Excellent). As shown here, the Value Line low total return forecast is 14%.