Citi Loves These 4 Retail Stocks But Hedge Fund Metric Urges Caution

– Investors with Long Positions (as of June 30): 35
– Aggregate Value of Investors’ Holdings (as of June 30): $681.28 Million

Lululemon Athletica inc. (NASDAQ:LULU) is not only Citi’s top retail pick, but also the most popular retail stock in this list among the hedge funds tracked by us. During the second quarter, when shares of the company remained largely flat, the number of hedge funds we track that had a stake in it increased by three. However, the aggregate value of stakes held by these funds saw a marginal decline of 4.8% during the same period. Shares of the company slumped by more than 15% on September 10 after it reported its second quarter earnings, even though the numbers came in better than expected. Experts who follow the stock closely cited growing inventories and a high P/E ratio as being among the reasons that led to the pullback in the stock. Nevertheless, analysts at Citigroup are bullish on the company because of its “great global brand expansion, great category and momentum” and have a price target of $69 on it, which represents potential upside of more than 30%. Ken Griffin’s Citadel Investment Group was also the largest shareholder of Lululemon Athletica inc. (NASDAQ:LULU) at the end of the second quarter among the funds tracked by Insider Monkey, owning over 2.0 million shares of the company.

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