American Eagle Outfitters (AEO), The Buckle, Inc. (BKE): Can Clothes Help Make Your Portfolio Recession-Proof?

Despite those arguments for the bulls, however, I think that the company’s limited international expansion is too hard to ignore. I would avoid buying The Buckle, Inc. (NYSE:BKE)’s stock.

Ross Stores, Inc. (NASDAQ:ROST) offer brand names at a bargain

Because Ross Stores, Inc. (NASDAQ:ROST) offers name brands at a bargain, the store looks attractive for recession-proofing your portfolio. The firm hit a home run in the last quarter’s earnings release when its GAAP-reported sales finished 7.8% higher than in the previous year’s first quarter. Looking ahead, the average estimate is $2.51 billion in sales, with an average earnings per share of $0.93.

The picture improves further when taking a look at next year, where analysts estimate revenue at $10.33 billion and earnings per share at $3.89. Here at The Motley Fool, 392 members of 425 who voted believe the stock will outperform. Wall Street agrees. In the S&P Capital IQ, most believe the firm will outperform with an average price target is $66.95.

Which to choose

American Eagle Outfitters (NYSE:AEO) looks to be the firm with the greatest upside potential. I am privy to investing in companies that are heavily involved in the global village. Greater exposure to less stable economies makes the company less attractive to the bearish investor, however. When recession-proofing your portfolio, I would choose a firm that is located in a more stable economy (if we can call the American economy stable). As a bargain outlet that still provides investors with name-brand clothes, Ross Stores, Inc. (NASDAQ:ROST) appears to be in the best position to profit in a recession — and so for the purposes of protecting your portfolio, I would invest in this company.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends The Buckle. The Motley Fool owns shares of The Buckle. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Can Clothes Help Make Your Portfolio Recession-Proof? originally appeared on Fool.com is written by Phillip Woolgar.

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