jonreagan

Four New Winners For Your Portfolio

Totally agree with you on LUFK and COF; I don't know enough about GLYT, but it sounds interesting, and thanks for the tip.
Couldn't disagree with you more, though on Bon-Ton. The retail sector is definitely beat up right now; if you're looking for a real opportunity, why not go with a stock which has had solid fundamentals, and taken a price beating, than one which consistenly posts negative same-store sales?

Either Nordstrom (JWN) or Penney (JCP) would make a better play at this point. Nordstrom was at $59 in Feb, and $48 today. In between, they had a first quarter with a 9% revenue increase, and 25% increase in EPS. For July, same store sales came in at +10%. All of this in a pretty unforgiving retail climate.

JC has an incredible growth plan between now and 2010, with approx. 300 new "off-mall", smaller stores, and a continued growth in their private label brands. Penney's emphasis on private brands has helped innoculate them for the gross margin erosion that usually comes in a promotional, price-driven environment. And they have a multi-channel strategy--stores, catalog, and e-commerce--that is the best in the industry. At $64 today, ($87 in Feb), either Penney or Kohl's (KSS) represent great value in the "mid-tier" of retailers.

Sadly, I believe regional retailers like Gottschalks (CA) and Bon Ton (Northeast/Midwest) are dinosaurs that will collapse of their own weight. Even Macy's is finding out after their acquistion of May Company, that just getting bigger is not a guarantee of success. In a sector this competitive, winning is more about smart growth, and above all, giving the consumer added value.