- Retailers rarely have sustainable competitive advantages. Therefore, they should not be bought at fair value with plans to hold long term.
- However, there are times in which the market has massively discounted future earnings potential, leaving the stocks attractively priced.
- Retailers have suffered from a cyclical lag in consumer demand since the great recession, and an especially tough environment over the previous 12 months.
- The tough retail environment won't last forever, as there appear to be many tailwinds on the horizon for companies tied to consumer discretionary spending.
- Hhgregg is a great example today of an ugly business with a very attractive stock.