This morning, Toys R Us Inc. announced that it purchased high-end toy retailer FAO Schwarz. FAO has struggled mightily for years, thanks to harsh competition from discount toy stores.

Toys R Us CEO Jerry Storch stated, "We will work tirelessly to preserve the distinctiveness and integrity of the FAO Schwarz stores and brand as we grow the business and, indeed, take the brand to even greater heights."

Quantitative analyst and editor of OTC Insight, Jim Collins sees opportunity in Steve Madden (NASDAQ: SHOO), a shoe designer whose products are distributed through department and specialty stores, its 95 retail shops and its e-commerce site.

Fundamentally, Collins is attracted to a recent new product launch known as the "Design your Own" collection, which lets buyers choose between the size of the heels and the patterns, materials, finishings and colors to customize their own shoes. Collins points out that there are a total of 4,221 possible combinations.

Technically, Collins looks to the stock's very high relative strength ranking of 98 out of 100 as well as its solid score of 'B' for accumulation-distribution. He does caution that the company is exposed to fashion risk, which he notes can be difficult to predict. Despite these risks, he has selected the issue as his latest featured investment.

Validea has an unusual approach to stock selection; editor John Reese assesses companies based on the strategies employed by "legendary investors." In the case of his latest buy, Finish Line (NASDAQ: FINL), the stock was chosen based on the value methodology used by Benjamin Graham (Warren Buffett's mentor) and Peter Lynch.