12 Cheap Retail Stocks to Buy According to Hedge Funds

7. The Gap Inc. (NYSE:GAP)

Forward P/E: 11.15

Number of Hedge Fund Holders: 39

The Gap, Inc. (NYSE:GAP) is a specialty retailer in the US that offers apparel, accessories, and personal care products for women, men, and children. Its brand portfolio includes Old Navy, Gap, Banana Republic, and Athleta brands. The company reported net sales of $3.8 billion in fiscal Q3 2024, reflecting a 2% year-over-year growth. Its gross margin expanded 140 basis points, delivering an operating income of $355 million and an operating margin of 9.3%, an increase of 270 basis points versus last year.

On January 27, The Gap, Inc. (NYSE:GAP) announced an expanded partnership with Sean Wotherspoon, its global vintage curator, to release GapVintage and bring the company’s iconic product archive directly to customers across the globe. The company will include seasonal and themed drops, taking control of its vintage products as the secondhand market continues to grow and resonate among younger generations.

The company has a forward P/E of 11.15, and is trading at a 34.11% discount to its sector. Its median price target of $22.32 implies an upside of 34.41% from current levels. The Gap, Inc. (NYSE:GAP) ranks seventh on our list.