Some Retail Stocks worth looking

As I said to my WhatsApp group, usually I am not a big fan of retail stocks. However, with the current pandemic some stocks have been beaten down to earth bringing some good long term opportunity. As a matter of fact, I see some values in the following two retail stocks.

 

PVH Corp (PVH):

This New York based company offers a large number of brands, such as Tommy Hilfiger, Calvin Klein, Van Heusen, IZOD, ARROW, Geoffrey Beene, Warner's, Olga etc. It also sales licensed brands viz. Kenneth Cole, Michael Kors, DKNY, and Chaps. A couple of years ago, I had included this stock in my blog portfolio but sold when company’s fundamentals started deteriorating. and sold it with reasonably god profits. However, now the situation has changed due to COVID-19. Decreasing revenue, profits, diminishing cashflow has changed the scenario. The company has a hefty dividend yield of 17.6% but don't rely on dividends as this is not sustainable.

 

Bed Bath & Beyond (BBBY)

The company announced a couple of days that it’s planning to close over 200 stores over next two years bringing its already down its stock to $8. This company is also hurt by the pandemic resulting in reduction of sales and profit has further deteriorated its financial stress. However, the company said that e-commerce sales zoomed d by 82% over last three-month period. The company is currently focusing on new offerings like curbside pickup, store-based online fulfillment and enhancing the online shopping experience.

 

My View: With the current pandemic I do not expect these companies to shot up on sales and profit growth in the near term and an immediate turnaround. That’s the reason they are doomed at this time with depressed stock price. However, the good thing about these two stocks is their strong brand name, institutional holdings. Particularly , I am more positive about PVH rather than BBBY because of its large number of branded products and potential dividends. I do feel that both these companies have the potential to turnaround, though I like PVH more than BBBY. I have started taking some small positions in both these stocks. I may keep accumulating going forward for long-term. BBBY more of a trading stock but PVH seems to be a good long term investment for patient investors. Please note that these stocks are not in my blog portfolio at this time. If and when I find it right I may/may not include it. The Q2FY20 earnings kicks-off next week. These companies will also be reporting in next few weeks which will provide further visibilities.

 

Disclaimer: The above equities are just my opinion and not a recommendation to buy/sell. I do NOT provide any professional recommendation to buy/sell any stock, ETF, mutual fund, or any other security(s). So, each investor has to do their due diligence before taking any action.

Comments

Post a Comment

Popular Post

Shesa's JANUARY 2025 Investment Blog

  By Shesa Nayak Wishing all my blog readers a WONDERFUL NEW YEAR - 2025!! May this year bring joy, happiness and prosperity with your investment!!   U.S. Stock Market Update   We saw two consecutive years (2023, 2024) of great stock market . For 2024, NASDAQ soared 28.64% , S&P 500 was up 23.31% and DOW gained 12.88% . The new year started with a lackluster note but Friday, January 3, was a great day for the stock market. We may see further momentum starting Monday once institutional investors are back from vacation. However, let’s recap how did 2024 go.  Recap of 2024 : The stock market picked up starting January 17, 2024 till April early April with the hope that there will be several rate cuts by Federal Reserve. However, that optimism failed and re-inflation risk scared the investors causing market to slide till first week of August before picking up in the end of August. The month of September started on a bad note but reignited and rallied to end ...
Read more

Trump Presidency and Q4 Earnings and

Today Donald Trump  became the 47th President after talking oath. We may see a flurry of executive orders signed to undo  many regulations of the previous administration. In my view, stock market should have a positive impact on the stock market and overall economy.  Hopefully, we may see a new era of changes good for America. But only time can tell.. Also, we will see Q4 earnings from the big tech companies In days and weeks ahead. The stock market may take a direction depending on the earnings. However, I want to remind that we may see lots of volatility going forward. And hence, there may be situations, buy the dip and sell the rip/upward momentum. ECONOMY NEWS Producer inflation was weaker-than-expected across the board, with headline PPI rising 0.2% (vs 0.4% expected) and core PPI flat (vs 0.3% expected). Friends, Good morning! The CPI - inflation rate slows to 3.2% vs. 3.3% expected. For the month of December, CPI increased a seasonally adjusted 0.4%. ...
Read more

WEEKEND UPDATES - 2/1/25

The Federal Reserve paused its interest rate cutting campaign last Wednesday and gave no signal it plans to lower rates again in the foreseeable future.   The decision to hold rates steady at a range of 4.25% - 4.5% . Obviously, FED   seems little careful of re-inflation fear and potential impact because of President Donald Trump’s economic policies. The Personal Consumption Expenditure ( PCE ) report came last Friday that rose 2.6% over the year in December, up from 2.4% in November and in line with economists forecast. Meanwhile, the DeepSeek drama that crushed tech stocks last Monday seems to be overblown. I will write more on my next blog. Stay tuned!  EARNINGS Meta Platform (META) Earnings per share: $8.02 vs. $6.77, up 49% YOY. Revenue: $48.39 billion vs. $47.04 billion, up 21% YOY. Meta said its first-quarter revenue would be in the range of $39.5 billion - $41.8 billion. Analysts were expecting first-quarter revenue of $41.73 billion. My Vi...
Read more