Tuesday, April 29, 2008

Retail

Yesterday's column was on certain sub-sectors of the retail sector. The conclusion was that there were a few looking strong but in need of pullbacks and a few with potential breakouts pending. I couldn't really piece together a theme - such as big boxes or department stores and had to settle for big chains.

That sort of got these two sub-sectors plus some drugstores but again, so what? Most listed retails companies are chains. I mean I like food retailer Stew Leonard but with only four stores in the northern NYC suburbs it just does not merit a listing on the NYSE. (Awesome stores that they are!).

So how did I even come to find any retail stocks that looked decent? A screen of technicals and even some fundamentals turned them up and they are really just one-off picks. There is no compelling sub-sector theme and that is worrisome. Sectors returns are a huge chunk of individual stock returns and I am not so sure that even the picks in the column are going to be performers for the long-haul.

Make no mistake, I would buy them if I were a full time trader. There is no take-back on the positive write-up. It's just that staying power is questionable. Big gasoline prices are not going away and consumers are still getting pinched.

4 comments:

Anonymous said...

With the February high breached by a whopping $6 on modest volume, have you lost your inner "bear?" Ready to join the Alfred E. Newman ("what me worry") rally? When the Fed finally communicates their pause, investors could actually start thinking (for a change) about future earnings ultimately leaving the denial phase of this market correction.

Quick Takes Pro said...

Perhaps you have not been reading me that closely. I think these stocks are short-term only and only if they either break out or pull back properly to trendlines.

Have a re-read of http://online.barrons.com/article/SB120829364826017219.html and feel comfy in your cave that I expect lower prices in the 3rd-4th quarter of this year. Just to refresh everyone;s memory, this is the column where the Foundation for the Study of Cycles calls the low. They were spot on calling the short-term wiggles since last October through today.

Better yet, sign up for my newsletter and let me drum that into your head on a daily basis.

Quick Takes Pro said...

Well, that link didn;t work too well. Try this tiny one:

http://tinyurl.com/5um6sl

I am not sure if it is behind th pay site or not so if it is I can send it to you. You will have to lose your anonymous moniker, however.

Petr said...

It's hard to get excited about the retail sector. As you mentioned - very short term play (for the brave ones). This recession is consumer led and it won't be a short one. The only winners I see are the discount chains and they seem to be fairly valued.