Thursday, March 12, 2009

Is It Time To Look At Retailers?

A value investor must look at out of favor sectors in order to find value, and there are few sectors more unloved right now than retail. The American consumer is dead say the pundits, and we must prepare for life without these out of control spenders.

However, the Commerce department reported today that retail trade sales were down 0.1% in February, and January sales were revised to a stronger increase of 1.8%. Is it time to hunt for bargains in this sector? I found a list of cash rich companies and noticed three retailers on it –

Foot Locker - $2.78 cash per share.
Sears Holding - $6.12 cash per share.
Abercrombie & Fitch - - $6.75 cash per share.

I haven’t independently verified these numbers, but certainly pessimism is too great in this sector and investors should start looking for the companies that will emerge from the recession.

This article was written by Stock Market Prognosticator. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

1 comment:

  1. Retailers are quite risky to judge right now. I agree that they are available at bargain right now, but they run the high risk of getting out of game. I had read an article about Abercombie & Fitch in WSJ, and this retailer was included in the list of those struggling with holiday sales. I would wait for some more time, before putting my money in them.

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