Frederick's of Hollywood Group, Inc. (FOH)

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November 18, 2009

Rockin' Stock Pick: Frederick's of Hollywood Group, Inc. (FOH)

Stock Price: $1.24

Frederick’s of Hollywood Group, Inc. conducts its business through its multi-channel retail division and wholesale division. Through their multi-channel retail division, the company primarily sells women’s intimate apparel and related products under their proprietary Frederick’s of Hollywood® brand through 130 specialty retail stores nationwide, their world-famous catalog and online shop at www.fredericks.com.

FOH has been affected negatively by weak macro-economic conditions. We believe the weak economic conditions of 2009 have created an opportunity for investors to take a serious look at FOH for 2010.

FOH is currently trading at a market cap of around $32.75 million. The Frederick's of Hollywood brand has a 60-plus year pedigree.

A new CEO came on board to FOH in January 2009 and a number of this new CEO's initiatives will take some time to impact their business. The company is looking for their short-term and long-term initiatives to result in a clear path to growth and profitability.

FOH reached a high of $2.54 on 9/16. Volume has begun to dry up at its current level, which means selling may have dried up. We believe the bad news could be priced into FOH at its current level and the next catalyst could take it higher.

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