CHICAGO, Jan. 28, 2013 /PRNewswire/ -- Zacks Equity Research highlights Francesca's Holdings Corporation (Nasdaq:FRAN) as the Bull of the Day and Tiffany & Company (NYSE:TIF) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Vornado Realty Trust (NYSE:VNO), Starwood Property Trust Inc. (NYSE:STWD) and Digital Realty Trust Inc. (NYSE:DLR).
There have been retail winners and losers emerging from the 2012 holiday season. One of the winners was Francesca's Holdings Corporation (Nasdaq:FRAN) which recently raised its fourth quarter guidance based on a strong holiday performance. It's a Zacks Rank #1 (Strong Buy).
Francesca's operates 360 small stores in 44 states in strip malls, shopping malls and neighborhoods which sell a mix of apparel, jewelry, accessories and gifts in a homey setting. It targets female shoppers aged 18 to 35 and brings in new merchandise every week to keep offerings fresh.
The company also has a website, francescas.com, which accounts for only 1.5% of sales but more resources are expected to be put into online sales this year.
There were retail winners and losers this holiday season. Tiffany & Company (NYSE:TIF) fell into the loser category as the company recently lowered fourth quarter guidance due to weak holiday sales. The stock recently fell to a Zacks Rank #5 (Strong Sell). Everyone knows Tiffany. The famous luxury retailer operates 274 stores across the globe, with 115 of them in the Americas.
There were high hopes going into this holiday season, especially for the luxury retailers. The theory went that the high end consumer would keep spending despite fears of the fiscal cliff and possible higher tax rates and those aspirational consumers, who want to be in the high end someday, would splurge on a number of key brands.
But on Jan 10, Tiffany reported flat holiday comps. Most disappointing of all, it was a 2% same store sales decline in the Americas which really hurt. Even Asia-Pacific, which included a supposedly slowing China, grew same store sales at 7%. Europe's same store sales were flat year over year, but that was expected given the economic climate there.
Vornado Realty Trust (NYSE:VNO) expects to reap around $241 million as net proceeds from the sale of LNR Property LLC, a company in which Vornado holds a 26.2% stake. The deal that LNR Property has penned would see Starwood Property Trust Inc. (NYSE:STWD) and Starwood Capital Group acquiring LNR Property for $1.05 billion in cash. It is anticipated to close in the second quarter of 2013, subject to customary closing conditions.
Notably, LNR is currently owned by affiliates of Aozora Bank Ltd, a subsidiary of certain investment funds managed by Cerberus Capital Management L.P., iStar Financial, a subsidiary of certain investment funds managed by Oaktree Capital Management, L.P., and Vornado Realty Trust.
New York-based Vornado Realty acquires, owns and leases office properties, retail space and temperature-controlled logistics and refrigerated warehouses. Besides its properties, the company has investments in other REITs, industrial buildings, retail assets, and Toys 'R' Us.
Vornado Realty has a strong asset portfolio in two of the best long-term office markets in the U.S. – New York City and Washington DC. This provides the company with a competitive advantage to continually increase rents. The company also has a healthy balance sheet and adequate liquidity. The recent LNR deal will further add to Vornado's financial flexibility and hence we remain encouraged.
Vornado Realty currently carries a Zacks Rank #3 (Hold). A number of companies that are also performing well in the same industry and deserve a look include Digital Realty Trust Inc. (NYSE:DLR), which carries a Zacks Rank #2 (Buy).
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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