Can 11 retail stocks rise from the woodshed?

These companies have all seen declines of at least 15 percent from their 2013 highs, but they're now poised for rebounds.

By TheStreet.com Staff Jan 16, 2014 11:49AM

Stock market chart © Ash Waechter/Getty ImagesBy Richard Suttmeier

 

NEW YORK (TheStreet) -- On Wednesday afternoon the Federal Reserve releases its Beige Book for the Jan. 29-30 FOMC meeting. I always view the Beige Book as a combination of gossip from the 12 Federal Reserve districts, and the theme has not changed since the December report. The U.S. economy continues to grow at a moderate pace. This indicates that the FOMC will likely reduce its bond purchases by another $10 billion a month in February.

 

A potential economic problem I have been observing is weakness in the consumer segment as several stocks in the retail-wholesale sector were taken to the woodshed on weaker than expected earnings in 2013. Today I am providing my 'buy and trade' parameters for 11 retailers that have declined by 15 percent or more from their 2013 highs and after doing so maintained or were upgraded to buy or strong buy according to www.ValuEngine.com.

 

The biggest loser is Aeropostale (ARO) down 54.5 percent followed by Lululemon (LULU) down 39.8 percent then GameStop (GME) down 36 percent. Using my 'buy and trade' investment strategies investors can try to 'catch a falling knife' using a good-until-cancelled GTC limit order to buy weakness to a value level. The Street on MSN Money

 

Aeropostale ($7.78 vs. its 2013 high at $17.10 down 54.5 percent) has been below its 200-day simple moving average since Aug. 8 with that average down to $11.58 with a recent low at $7.62 on Jan. 13. The weekly chart profile is negative with its five-week modified moving average at $8.76 and its 200-week SMA at $17.84. This retailer has a buy rating is 30.9 percent overvalued with a loss of 41.3 percent over the last 12 months. My Semiannual and monthly value levels are $4.81 and $4.60 with semiannual pivots at $6.76 and $6.88.

 

Bed Bath & Beyond (BBBY) ($67.34 vs. its 2013 high at $80.82 down 16.7 percent) broke below its 200-day SMA at $73.58 on Jan. 9 trading down to $66.27 on Wednesday. The weekly chart profile is negative with its five-week MMA at $74.67 and its 200-week SMA at $58.88. This retailer has a strong buy rating is 1.8 percent undervalued and still has a gain of 20.7 percent over the last 12 months. My annual value level is $64.99 with weekly and quarterly risky levels at $74.56 and $79.77.

 

Big Lots (BIG) ($30.51 vs. its 2013 high at $39.22 down 22.2 percent) broke below its 200-day SMA at $35.24 trading down to $29.91 on Jan. 13. The weekly chart profile is negative with its five-week MMA at $32.54 and its 200-week SMA at $35.33. The retailer has a buy rating is 3.3 percent overvalued with a gain of 2.5 percent over the last 12 months. My weekly value level is $28.32 with a quarterly pivot at $31.20 and monthly and semiannual risky levels at $33.24 and $37.42.

 

Bob Evans Farms (BOBE) ($47.91 vs. its 2013 high at $60.21 down 20.4 percent) broke below its 200-day SMA at $50.34 on Jan. 8 trading as low as $47.55 on Jan. 13. The weekly chart profile is negative but oversold with its five-week MMA at $50.88 and its 200-week SMA at $37.50. The restaurant has a buy rating is 15.3 percent overvalued with a gain of 10.9 percent over the last 12 months. My annual and semiannual value levels are $47.70 and $45.26 with weekly and semiannual pivots at $48.12 and $49.85 and quarterly and monthly risky levels at $56.53 and $59.80.

 

Express (EXPR) ($18.76 vs. its 2013 high at $25.05 down 25.1 percent) broke below its 200-day SMA at $21.04 on Dec. 4 and traded as low as $18.02 on Dec. 12. The weekly chart profile is negative but oversold with its five-week MMA at $19.79. The retailer has a buy rating is 0.2 percent undervalued and gained 30.7 percent over the last 12 months. My weekly value level is $15.62 a quarterly pivot at $18.45 and monthly risky level at $25.14.

 

Five Below (FIVE) ($39.71 vs. its 2013 high at $55.28 down 28.2 percent) broke below its 200-day SMA at $41.82 and traded as low as $37.77 on Jan. 13. The weekly chart profile is negative with its five-week MMA at $43.61. The retailer has a buy rating and gained 24.8 percent over the last 12 months. My weekly value level is $35.56 with a quarterly pivot at $39.53 and monthly risky level at $48.93.

 

GameStop ($36.97 vs. its 2013 high at $57.74 down 36 percent) broke below its 200-day SMA at $44.96 on Jan. 14 trading as low as $36.00 on Jan. 14. The weekly chart profile is negative with its five-week MMA at $46.38 and its 200-week SMA at $27.14. The game retailer has a strong buy rating is 13.5 percent overvalued and gained 59.6 percent over the last 12 months. My semiannual value level is $33.36 with weekly and semiannual pivots at $38.81 and $39.50 and a quarterly risky level at $43.53.

 

Krispy Kreme (KKD) ($19.51 vs. its 2013 high at $26.63 down 26.7 percent) has been trading back and forth around its 200-day SMA at $19.33 since Dec. 11. The weekly chart profile is negative with its five-week MMA at $20.30 and its 200-week SMA at $9.68. The doughnut maker has a buy rating is 5.2 percent overvalued and gained 70.5 percent over the last 12 months. My semiannual value levels are $18.87 and $15.19 with a quarterly pivot at $20.31 and monthly risky level at $27.02.

 

Lululemon ($49.65 vs. its 2013 high at $82.50 down 39.8 percent) has been below its 200-day SMA at $69.64 since Dec. 10 and traded as low as $48.89 on Jan. 14. The weekly chart profile is negative but oversold with its five-week MMA at $60.10 and its 200-week SMA at $53.85. The yoga pants retailer has a strong buy rating is 28.2 percent undervalued and declined 28.5 percent over the last 12 months. My weekly and monthly risky levels are $58.42 and $60.25.

 

ULTA Salon (ULTA) ULTA ($85.89 vs. its 2013 high at $132.72 down 35.2 percent) has been below its 200-day SMA at $103.28 since Dec. 6 and traded as low as $82.42 on Jan. 15. The weekly chart profile is negative but oversold with its five-week MMA at $98.63 and its 200-week SMA at $71.36. The cosmetics retailer has a buy rating is 10.4 percent undervalued and declined 9.2 percent over the last 12 months. My weekly value level is $70.75 with a semiannual risky level at $120.79.

 

Zumiez (ZUMZ) ($22.67 vs. its 2013 high at $33.50 down 32.3 percent) has been below its 200-day SMA at $28.17 since Dec. 4 and traded as low as $22.05 on Jan. 13. The weekly chart profile is negative with its five-week MMA at $25.40 and its 200-week SMA at $26.09. The retailer has a buy rating is 18.6 percent undervalued and gained 8.3 percent over the last 12 months. My weekly value level is $21.72 with weekly and quarterly risky levels at $26.98 and $28.69.

 

At the time of publication the author held no positions in any of the stocks mentioned.

 

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

 

More from TheStreet:

6Comments
Jan 16, 2014 12:04PM
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Retail Stocks are ones I avoid at all costs ! Retail is going to be declining for the long term.
Jan 16, 2014 6:39PM
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A future Republican in the making.

http://www.youtube.c​​om/watch?v=AukE25is​p​VY

They are simply adorable and loving little things aren't they?
Jan 16, 2014 12:37PM
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I wouldn`t trust any of them.There`s better places to be.
Jan 16, 2014 12:49PM
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Well, do not be surprised about today's drop so far after the last couple of days; we thought we could keep things flat but to no avail....At 1045 hrs manipulators started doing their thing, taking over on and off the floor and we are down all of a sudden almost triple digits...Why, you may ask? Because they can, face it, scumbags not happy at all after their good start to 2014 we've had three triple digit up days, two coming this week so, they are doing their thing without shame....Just be very careful today, more later.
Jan 16, 2014 12:23PM
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tHE aRTICLES ARE GETTING A LITTLE STALE AND LONG IN THE TOOTH..(found it)

Been trading.


Hate to see Top Stocks go away too or get rolled up into something else; Some of the articles are a good read and informative....If we would only utilize them that way.

A Political Forum, this was never designed to be....And don't make the excuse of how important politics are to the Markets, more likely the opposite.


I agree with premise about Retail, user9039; But consider something like Walgreens (WAG) they have held up well, pretty much from start to finish in our Recession and there are others.

Home Improvement might pop back some.

And we are sitting on Target(TGT), not knowing what to do.?

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