7 Stocks Poised for a Back to School Rebound

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 |  Includes: BBY, GPS, JWN, RSH, SKX, SPLS, TGT
by: Rougemont

The market correction for the past couple weeks has hammered a number of stocks, sending them back to levels not seen for a long time. These types of broad market declines often take even solid companies down below their fair value. The stocks below have been punished by the markets, and might be worth buying into now as investors start turning towards the upcoming back to school shopping season. The back to school shopping season is one of the strongest for retailers and it boosts the sales of everything from clothing, computers, office supplies and more. Here are several stocks that might see an increase in sales as well as stock price appreciation in the coming weeks:

Sketchers (NYSE:SKX) shares are trading at $15.95. Sketchers is a leading maker of shoes, and is based in California. These shares have traded in a range between $13.29 to $29.95 in the last 52 weeks. The 50 day moving average is $14.61 and the 200 day moving average is $18.86. Based on inventory issues and company guidance, it appears that revenues and margins will continue to be weak, but things might improve for SKX in 2012. Sketchers shoes appeal to youthful consumers and plenty of kids will start the new school season out with a new pair of shoes.
RadioShack Corp. (NYSE:RSH) shares are trading at $12.83. RadioShack operates a chain of specialty retail stores focused on electronics, computers and other items. These shares have traded in a range between $11.71 to $23.38 in the past 52 weeks. The 50 day moving average is $13.13 and the 200 day moving average is $15.80. Earnings estimates for RSH are $1.60 per share in 2011 and $1.83 for 2012, so the PE ratio is about 6 on these shares. RSH pays a dividend of 25 cents per share which is equivalent to a 2% yield. The PE ratio and other valuation metrics indicate these shares are cheap. RadioShack sells computers, mobile phones and other items that are usually popular with back to school shoppers.
Target Corporation (NYSE:TGT) shares are trading at $48.44. Target is a major retailer. These shares have traded in a range between $45.28 to $60.97 in the past 52 weeks. The 50 day moving average is $48.70 and the 200 day moving average is $52.12. Earnings estimates for TGT are $4.13 per share in 2011 and $4.38 for 2012. Target sell many items that are purchased by back to school shoppers but this company is so large it might not move the needle.
Staples, Inc., (NASDAQ:SPLS) shares are trading at $13.69. Staples is a major specialty retailer of office supplies. These shares have traded in a range between $14.75 to $23.75 in the past 52 weeks. The 50 day moving average is $15.14 and the 200 day moving average is $1935. Earnings estimates for SPLS are $1.37 per share in 2011 and $1.57 for 2012, so the PE ratio is about 10. SPLS pays a dividend of 40 cents per share, which is equivalent to a 2.6% yield. Staples sells binders, paper, backpacks and everything else kids need for school.
Best Buy (NYSE:BBY) shares are trading at $24.52. Best Buy is a leading retailer of electronics and is based in Minnesota. The 50 day moving average is $29.19 and the 200 day moving average is $32.99. Earnings estimates for BBY are about $3.49 per share in 2011 and $3.72 for 2012 so the PE ratio is only about 8. The book value is stated at $15.23. Best Buy pays a dividend of 64 cents per share which is equivalent to a yield of 2%. Best Buy sells computers, mobile phones and other items that are usually popular with back to school shoppers.
Gap, Inc. (NYSE:GPS) shares are trading at $16.43. The Gap operates a chain of specialty retail clothing stores. These shares have traded in a range between $15.26 to $23.73 in the past 52 weeks. The 50 day moving average is $18.13 and the 200 day moving average is $20.47. Earnings estimates for GPS are $1.47 per share in 2011 and $1.73 for 2012, so the PE ratio is about 9 on these shares. GPS pays a dividend of 45 cents per share which is equivalent to a 2.7% yield. With many consumers looking for value when they buy clothing for their kids, the Gap will likely benefit.
Nordstrom, Inc. (NYSE:JWN) shares are trading at $44.67. JWN is a leading high end specialty retail department store. These shares have traded in a range between $28.44 to $52.15 in the past 52 weeks. The 50 day moving average is $46.58 and the 200 day moving average is $44.46. Earnings estimates for JWN are $3.05 per share in 2011 and $3.49 for 2012. Higher income families are likely to shop here for their kids and themselves.
The data is sourced from Yahoo Finance and Insidercow.com. The information and data are believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes only.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.