Anthony Scaramucci's Hedge Fund Trade Of The Week: Aeropostale (ARO)

CNBC Fast Money's Anthony Scaramucci said on the show that this week's hedge fund trade of the week is Aeropostale, Inc. ARO. He explained that Aeropostale, Inc. (ARO) is an apparel seller to the adolescents between 14 - 17 years. It has fantastic margins, and a great return on equity and on invested capital. ARO's free cash flow yield is 12.4%. Anthony Scaramucci said that this stock is very cheap. He compared ARO to J. Crew Group, Inc. JCG, which was sold to a group of private equity buyers at 8.6 EBITDA, and ARO trades at approximately 4 times EBITDA. There is a risk that some of the buyers could turn to Abercrombie & Fitch Co. ANF, when the economy recovers, but Mr. Scaramucci doesn't believe that this scenario could happen soon. George Soros, Ronald Muhlenkamp, and John Hussman are some of the big players that own this stock. Aeropostale, Inc. ARO jumped 1.08% today, and closed at $24.33. Anthony Scaramucci believes that it is worth at least $33 per share.