J. Crew in Fashion Since Buyout Offer

Wall Street Cheat Sheet submits:

One of the fundamental elements of the Wall St. Cheat Sheet investing framework places the utmost importance on a company’s low debt position. In the case of J. Crew (JCG), the hip retailer paid down its remaining $49.2 million debt balance at the end of the third quarter. With a cleaner balance sheet, J. Crew became even more attractive to potential suitors. Earlier this week, J. Crew received a buyout offer from TPG Capital Group and Leonard Green & Partners LP for $43.50 per share in cash, or about $3 billion.

At a time when bears on Wall Street have been stuck in the mud since the crash of 2009, analysts put out a mixed reaction on the buyout. Considering J. Crew shares were once fetching more than $50 per share earlier this year, the private equity buyers smelled opportunity. If you look

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