Posts Tagged ‘Wal Mart’
It’s a Screaming Buy for Retailers!
By George Leong, B.Comm. for Profit Confidential
The retail sector showed some strong spending in January, which could bode well for the remainder of the year, given the improved jobs growth, higher home prices and property wealth, and the aversion of higher taxes for those individuals earning less than $400,000 per year.
The Thomson Reuters Same Store Sales Index (comprising 18 U.S. retail chains) increased a better-than-expected 5.8% in January, beating the 3.5% estimate and the 4.4% advance in January 2012. The news is good for the retail sector in 2013.
The SPDR S&P Retail Index shows a steady uptrend since its sharp decline in August 2011, highlighted by an ascending triangle and a break above the horizontal resistance line. The strong relative strength and moving average convergence/divergence indicator are flashing a “buy,” based on my technical analysis.
Chart courtesy of www.StockCharts.com
The chart shows the retail sector is likely headed for higher gains.
The big winners in January were diverse, but the major department stores in the retail sector reported some excellent results that blew away Wall Street estimates.
Macys, Inc. (NYSE/M) reported a stellar 11.7% surge in its January same-store sales, well above the average five percent estimate, based on Retail Metrics Inc. (Source: Townsend, M., “Macy’s Leads Biggest Same-Store Sales Gain Since 2011,” Bloomberg, February 7, 2013.)
Kohls Corporation (NYSE/KSS) was equally impressive, with a 13.3% increase in same-store sales, well above the 3.1% Thomson Reuters estimate.
Nordstrom, Inc. (NYSE/JWN) saw same-store sales surge 11.4% in January.
The Gap, Inc. (NYSE/GPS), which was struggling years ago, is now well on its way to retail stardom, reporting same-store sales growth of eight percent in January, … Read More
From Discount to Big Box: Some Retailers to Watch
By George Leong, B.Comm. for Profit Confidential
It’s now officially the holiday shopping season after a relatively decent Good Friday and Cyber Monday. Online spending, according to the Adobe Digital Index, is estimated to reach record sales of around $2.0 billion, up 17% year-over-year. (“Cyber Monday Sales Climb to Record $2 billion,” BGR, last accessed November 27, 2012.) If the numbers are any indication, the retail sector could be in for a strong holiday shopping season over the next four weeks. We know shoppers are the most confident since February 2008, as the Conference Board consumer confidence reading came in at 73.7 in November. Add in the continued uptrend in home prices and, hopefully, job creation into 2013, and you have a good and much-improved climate for the retail sector.
Given what will be higher consumer spending as we head into 2013, the retail sector will definitely be a place to park some investment capital. I recently talked about some of the leading luxury stocks to look at, especially as a play on the strong retail sector market in China. (Read “Luxury Stocks That Are Leading the Pack.”)
The retail stocks that I envision to be successful will be both the manufacturers and the retail outlets.
For the more conservative investors looking for steady growth and dividend income, at the top of my list in the retail sector is Wal-Mart Stores, Inc. (NYSE/WMT) and Target Corporation (NYSE/TGT). Wal-Mart is an excellent global retail sector play, but it will need to get deeper into China to really make a dent and drive the share price higher. Target is intriguing, as the “poor cousin” of Wal-Mart … Read More
The Best Retail Stocks this Holiday Shopping Season
By George Leong, B.Comm. for Profit Confidential
Today is the big day for you shoppers! It’s Black Friday, and the retail sector is hoping you have the “shop until you drop” mentality this year. Retail heavyweights Wal-Mart Stores, Inc. (NYSE/WMT) and Target Corporation (NYSE/TGT) are two major retailers that decided to open their doors Thursday night and enter the Black Friday shopping window earlier.
At stake are billions of dollars and the potential to give the retail sector a significant boost in the fourth quarter.
The post-Thanksgiving shopping season for the retail sector is critical. Retail sales have increased in three straight years and hopes are for another great year. (Read “Why the Market Needs a Big Black Friday.”) Yet there is some caution. The National Retail Federation (NRF) is estimating that the retail sector could see sales jump 4.1% in the November to December period, versus 5.6% during the same period last year. The slower estimated growth could be due to the uncertainty of the fiscal cliff, and its impact on spending and the economic recovery. Consumers don’t like uncertainty.
So when you are shopping today at the stores or online, keep in mind that every dollar you spend will help America’s ability to expand as we head into 2013.
The question is: which will be the best retail stocks this holiday shopping season? My feeling is that buying in the retail sector continues to be selective and somewhat cautious, as evidenced by the retail sales reading in October that pointed to a 0.3% decline in total spending, worse than the market estimates and the 1.3% reading in September.
While the readings in … Read More
Why the Pros Are Dumping Tech Stocks in Favor of Boring Companies
By George Leong, B.Comm. for Profit Confidential
Something you need to make note of: technology and growth stocks are being sold by institutional investors. Following where the professional money is flowing gives us another tool to evaluate the stock markets and get a sense of what is happening. The pros generally have better access to a company’s executives and management and may be privy to better information, although they will surely never tell you this. Just try calling the chief executive of a company to talk about things. Your call will never be connected. However, if you were a top Wall Street analyst, your call would likely be connected.
So, now that we’ve established that the pros have an information advantage, your key task is to find out what these pros are buying or selling.
The concept of following the money of institutional investors is based on the belief these experts are likely to understand the company’s situation more than anyone outside of the executive management group. By looking at the flow of money from institutional investors and monitoring what stocks they are buying, you can get a much better sense of what stocks may be in favor at that time. This especially holds true for the top-ranked institutional investors and money managers who are tops in the money management business, because they are the very best and produce the best returns for clients.
Institutional investors control vast sums of capital and can sway the direction of a stock that they buy or sell. These institutional investors are also extremely accountable to their investors; hence, there is a high level of quality research and due diligence … Read More
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