Retail Priced For Perfection (ANN, JCG, ANF, ETH)

This morning I was browsing through some retailers that have caught my attention due to their remarkable runups recently. Retailers have been buoyed by better-than-expected February sales, strong earnings reports and analyst upgrades.

I decided to look at forward p/e ratios for a few names and, from a value investing standpoint, did not like what I saw. Now, I know the p/e ratio is highly controversial and is easily shrugged off during bull and bear markets alike, but it can still offer insight into a stock's valuation.

Also, the forward p/e ratios I am citing are from yahoo and are for FY2011. Since we are already in 2010, I guess we should look more than nine months ahead into next year, even though the market "supposedly" discounts only 6-9 months ahead.

AnnTaylor (NYSE: ANN) reports earnings on March 12 and has a forward p/e of 27.14.

J. Crew Group (NYSE: JCG) reports earnings after the close today. It carries a forward p/e of 22.12.

Abercrombie & Fitch (NYSE: ANF), the stock that everyone loves to hate, sports a forward p/e of 17.77.

Finally, Ethan Allen (NYSE: ETH), which just came out and said written orders for January through February were up 25% year-over-year, is trading at 29.64 times forward earnings.

Thus, what we have is retailer stocks that have priced in a pretty robust recovery already. While still way off their 2007 highs, they are not exactly bargains by any means.