Displaying items by tag: kohls

(New York)

Many media outlets love to publish stories about bargain stocks (us included). However, there is a group of shares being pushed as a “great value” that are definitely not such, at least according to UBS. The bank says that the wide group of retail shares that have been mauled lately, including Macy’s, JC Penney, Kohl’s, TJ Maxx, and Ross are not a good value. These stocks have been hurt badly because of weak earnings and the general decline in brick and mortar, which falsely lead some to think they are a “buy”. “We think ongoing e-commerce disruption, plus tariffs, could cause not only these, but also many other public and private retailers to close stores in 2020 and beyond” says UBS, clearly showing that they don’t think the industry is out of the woods yet.

FINSUM: Retail has some juicy yields, but you really have to understand each stocks’ specific characteristics to know which ones to choose. This is an expert’s game. The cheat sheet is to lean towards discount retailers.

(New York)

Most analysts and investors are quite bearish on the market at the moment despite the fact that the trade war is looking less worrying. That said, there is still a lot of indecision over where the market is headed. With that in mind, Barron’s is arguing that buying beat up but high-quality dividend stocks is a safe bet no matter which way the market heads. Here are five stocks to look at: UnitedHealth, food products company Ingredion, drug company Eli Lilly, Kohl’s, and Ralph Lauren.

FINSUM: There are a lot of different types of names here. We are most interested in Ralph Lauren, which is trading at a 25% discount to its historical valuation. The company is very healthy—easily covering its 3% dividend with earnings—and it it not facing the same headwinds as other retailers because it is mostly a wholesale business, meaning it is agnostic to the shift to online selling.

(New York)

Kohl’s did something we think is really brilliant. The company announced yesterday that it has entered an agreement with Amazon to accept all the online retailer’s returns. Kohls’ shares soared on the news. The program is an expansion of a pilot it started in 100 stores, but will now offer the service in all 1,150 stores. Kohl’s will also be selling Amazon merchandise.

FINSUM: We know from in-depth retailing experience that returns are a huge driver of foot traffic and extra sales. This is a very smart way to bring new customers into the store. Kohl’s revenue will rise materially from doing this. Brilliant strategy and very synergistic for both sides.

(New York)

Retail stocks have seen management boost outlooks recently, but that hasn’t helped prices, which have been falling to end the year. However, despite headwinds in the sector, there are a handful of retailers that look likely to see good performance in the near term. Those stocks are Ulta Beauty, Target, and Kohl’s. All three stocks are up for the year but down big in the fourth quarter. One stock analyst summarized his views this way, saying “We like these three stocks given the strong underlying consumer, not easily replicable product assortments, digital investments and innovation”.

FINSUM: These are very consumer-staple oriented, which we think is a good choice for the currently tenuous market environment.

(New York)

It is that time of the year again, and investors need to watch out. January is historically the top month for retail bankruptcies, and it seems likely there is going to be another cull this year. Last year saw a furious pace of retail bankruptcies, with more companies going bust than during the Great Recession. January is traditionally when most companies file, according to data going back to 1981.

FINSUM: Christmas sales were a little better than feared this year, so a couple of zombies might linger on longer than January, but this is certainly going to be another year of retail bankruptcies.