"Well now that the turkey day, Thanksgiving, has passed and the Black Friday weekend is here, how are the stock prices of the retailers doing this year"

Dow Jones Industrial Average  11,232 (Down)  Week ending 11-25-2011

Well we celebrated the Thanksgiving holiday this week our traditional gathering to eat a sumptuous meal of Turkey here in the US.  It turned out that the week in the stock market also was a "turkey" as we had the worst Thanksgiving stock trading week since 1932. You will remember that year, " In 1932 the economy continued to deteriorate and unemployment increased further in 1932 to 24.1% , there were few jobs and many ordinary Americans were forced into living in the streets or in old cars. Towards the end of the year in November the American voter used the power of Democracy to show Herbert Hoover what they thought of his term of presidency during these bad times and voted strongly in favor of Franklin D Roosevelt by 472 electoral votes to 59. "   Sound familiar?  Maybe we will follow the lessons of history and make a change in our government and get things turned around.

I thought this week with the kickoff of Black Friday and the holiday shopping season that I would do something different and report just how some of the retail stocks are doing with their stock price year to date (YTD). I picked out a mix of stocks that I hear talked about often. I pulled my stats from the CNBC quote website.

Ulta Salon Cosmetics & Fragrance Inc.  (ULTA) -  +87.41%
lululemon athletica inc. (LULU) - +71.71%
Sally Beauty Supplies (SBH) - +41.22%
Express (EXPR) - +37.95%
Dollar Tree (DLTR) - +36.58%
Bed Bath and Beyond (BBBY) - +30.64%
Ross Stores (ROST) - +30.27%
TJX Cos. (TJX) - +26.37%
Costco -(COST) - +19.66%
Petsmart -(PETM) - +16.92%
CVS Caremark Corp. - +16.76%
Limited Brands (LTD) - +13.47%
Tiffany (TIF) - +13.32%
Foot Locker (FL) - +11.81%
Walmart (WMT) - +5.33%
Amazon (AMZN) - +2.90%
JC Penney (JCP) - (-9.78)%

One thing is apparent, you would have done pretty well buying most of the retail stocks on the list.  If you had bought a stock this year though like Best Buy you would have been down 41% so not all were winners. Surprisingly, Wal-Mart and Amazon not very high up on the list even with their high volume of sales. It appears that the 2011 holiday shopping season has been pretty good so far.

 If you are looking at the fundamentals of these companies just make sure that they do not have a large build up in inventories over multiple quarters. That is a Red flag that business is slowing up. I imagine that the best time to buy retail stocks would be now and then sell them into earnings in January.

I won't tell you which one to buy, but the one above seems to have a surplus of female customers that love their athletic clothing line.

Catch you next week,   Freewilly

Shhhhh! The fundamentals tell me that you should very quietly start buying the stock of Citigroup Inc."

Dow Jones Industrial Average 11,796  (Down) Week Ending 11/18/2011

Sometimes you are down so far that the only place to look is up. (picture left). There will continue to be rumblings and tumblings with the European countries and banking systems with the travails of the Euro. But one of these days, while the dust is settling, there will be a flight to safety to the recapitalized banks of the United States of America. And on that day, a company with one of the ugliest 5 year stock charts I have ever seen is going to start it's long ascent back up to prominence in the Dow.



5 Year chart of Citigroup (symbol C, NYSE)

 Citigroup Inc. (Symbol C, $26.28) has the fundamentals lining up to become a good one to three year investment. I know, you are thinking to yourself, what about the large overhang of the housing and mortgage market. The market will slowly digest it and the housing market will very slowly start to stabilize and turn around in the other direction. Inventories will eventually come down.

Citigroup has projected 2011 earnings per share of $4.08 and projected 2012 earnings per share of $4.45. 3rd quarter GAP earnings were up 75.71% this year's quarter over last year's quarter. Total Net Income continues to rise each quarter over the next. They are getting their fiscal house in order and it will be corrected over time.  Sales growth will be a rough road to hoe for a while with a company that has such large revenues to begin with.





Yes , you could play it safe in the treacherous waters of this market and buy a JP Morgan or Wells Fargo like some well noted investors have, and they are very good businesses, but their stocks are not trading at 49% off of their 52 week high price like Citi is here. This is a longer term trade that you will buy and put away awhile and check the price in about 6 months. The return will come over time, a rare thought in these markets.

Here is a New York Times link on the stock: http://topics.nytimes.com/top/news/business/companies/citigroup_inc/index.html

You may even save a few bucks if you buy it next week with Congress's "Super" Committee in deadlock and another possible US credit downgrade coming. Time for the US Govt. to finally get their financial house in order. 

Freewilly

"This Copper and Gold company is looking pretty inexpensive here. The stock? Freeport-McMoRan Copper & Gold Inc. (symbol FCX)"

Dow Jones Industrial Average 11,983   (Down) Week ending 11/03/2011



Mr. Dawes, Sr.: "When stand the banks of England,
England stands...when fall the banks of England, England falls!"

 A lesson from the movie Mary Poppins,  from so many years ago. Confidence. If little Michael doesn't save his tuppence at the bank, there will be foreclosures and business failures. When he decides that he wants to use his money to feed the birds instead , and wants to take it with him and the people hear that the bank won't give the money back, confidence is lost, panic ensues, and of course a run on the Dawes, Tomes, Mousely, Grubbs,  Fidelity Fiduciary Bank!

Confidence. The America’s Financial Industry Regulatory Authority gets a little twitchy and asked MF Global to post more capital to back up it's Euro-zone government bond exchange swaps with bets of 6 billion on Spain and Italy government bonds, which in normal times is a low risk exchange transaction. Then Moody's downgrades MF Global's credit rating and all the other firms lose confidence and stop trading with MF Global.

 On Halloween, Trick or Treat, MF Global says trick, and files for bankruptcy and has 700 million dollars of customer account money missing.  Jon Corzine, didn't you notice all those people outside your front window in the "Occupy Wall Street" protest that are there because of financial firms taking excessive risk with money?  I know you are a good guy, so I can only assume that you underestimated this new paradigm of risk that we live in today with the Euro-Zone troubles. I hope it somehow works out.

An Honorary Mention goes out also to Freddie Mac, who announced they lost billions and are asking for another 6 Billion from the government. (disgusted head shake here)  So let's talk now about making money instead of losing it.

Freeport-McMoRan Copper & Gold Inc. (Symbol FCX, $40.32).  With this stock you will see some common themes that I like. First, a 2.49% dividend for some income and to cut down on people shorting the stock. Second , the stock price is down from short term downturn in earnings , but earnings will increase going forward with a forward PE of 7.91. The company is projecting 2012 earnings of $.5.07 which is projected down from a few months ago when it was projected up near $5.57. I think we will have a rise in the price of copper and gold which will bring some of these earnings back in.

FCX has 5 year sales growth of 23.8%. Net profit margins have been 24.50%. The company has been running a return on equity of 38.90%.
To me , Copper is just plain cheap here at $3.56 per pound.


Gold has taken a little breather here, coming down from the $1950.00 and ounce level down to $1755.00 per ounce. This company gives you exposure to both metals. The company is also a Molybdenum mining company, if you have an affinity for that metal.

If you buy this stock you are with good institutional company.  State Street, The Vanguard Group and Blackrock each have 5% of their holdings in this stock. The financials of this company look very healthy to me.

I guess it wouldn't hurt us all to save a little more money and spend a little less. So, put some tuppence in the bank and restore a little confidence in our financial condition.

Freewilly