Victoria's Secret: DME Sells $7.7M as Stock Hits Highs
💡 Key Takeaway
VSCO's 93% surge pushed P/E above 30, creating profit-taking opportunity despite strong operational performance.
DME Capital Reduces Victoria's Secret Position
DME Capital Management sold 194,593 shares of Victoria's Secret (VSCO) worth approximately $7.73 million during Q4 2025. Despite this reduction, the fund's remaining VSCO position actually increased in value by $41.69 million due to the stock's strong performance throughout the quarter.
Victoria's Secret represented 3.3% of DME's $2.85 billion portfolio after the sale, placing it outside the fund's top five holdings. The stock has been a standout performer, rising 93.2% over the past year to reach $60.36 per share as of February 2026.
The company recently reported strong Q3 results with $1.5 billion in sales, representing 9% year-over-year growth that exceeded expectations. This performance prompted management to raise full-year guidance to $6.5 billion, contributing to the stock's momentum.
VSCO hit a 52-week high of $66.89 in January 2026, demonstrating the significant upside investors have enjoyed. However, this rapid appreciation has pushed valuation metrics to elevated levels that warrant caution.
Valuation Concerns Amid Strong Fundamentals
The stock's 93% surge over the past year has pushed Victoria's Secret's price-to-earnings ratio above 30, representing the highest valuation level in the past year. This creates a tension between strong operational performance and stretched valuations.
DME Capital's decision to trim its position suggests professional money managers see current levels as an appropriate time to take profits. The $7.7 million sale represents prudent portfolio management rather than a fundamental bearish thesis on the company.
Victoria's Secret maintains strong competitive positioning with approximately 1,400 stores and a global e-commerce platform. The company's focus on brand loyalty and customer experience continues to drive results in the competitive intimate apparel market.
For investors, the key question is whether current valuations adequately reflect future growth prospects. While the company's raised guidance is encouraging, the stock may have gotten ahead of itself in the near term.
Source: The Motley Fool
Analysis generated by Bobby AI quantitative model, reviewed and edited by our research team. This is not financial advice. Always do your own research before making investment decisions.
Bobby Insight
Current holders should consider profit-taking while potential buyers should wait for better entry points.
VSCO's 93% run-up has created valuation concerns despite excellent operational results. The stock appears fairly valued at current levels with limited near-term upside potential given the elevated P/E ratio.
What This Means for Me
