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JimVanMeerten (61.58)

Discount Wars - WalMart, Target, TJX

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April 06, 2011 – Comments (0) | RELATED TICKERS: WMT , TGT , TJX

In my area of the country there are 3 stores that seem to go head to head when it comes to the competition in discount retailing.  Each is highly competitive and my paper and mailbox are stuffed with fliers from each.  To have a diversified and balanced portfolio you have to include a discount retailer and it's hard to ignore these 3.  Let's make a head to head comparison in no particular order and pick a winner.  See if you agree with me.

TJX Companies (TJX) is slightly different than the other 2 in that they offer discount name brand clothing and housewares but not food items.

TJX Companies, Inc. (TJX) is an off-price retailer of apparel and home fashions in the U.S. and worldwide. The company operates T.J. Maxx stores, Marshalls stores, and Winners Apparel Ltd. stores, a Canadian off-price family apparel and home fashions chain. It also operates HomeGoods, a U.S. off-price home fashions chains, and T.K. Maxx, an off-price family apparel and home fashions chain in the United Kingdom, the Republic of Ireland and the Netherlands. In addition, it operates A.J. Wright, a new U.S. chain of off-price family apparel and home fashions stores.

Technical Factors:

1 - 100% Barchart technical buy signal

2 - Trend Spotter buy signal

3 - 3 new highs and up.91% in the last month

4 - Relative Strength Index 61.84% and rising

5 - Trades around 51.00 with a 50 day moving average of 49.46

Fundamental Factors:

1 - Wall Street brokerage analysts have published 7 strong buy, 4 buy and 9 hold recommendations

2 - Sales are projected to increase by 5.00% this year and 6.30% next year

3 - Earnings are estimated to increase by 10.60% this year, 11.90% next year and 13.70% annually for the next 5 years

General Investor Sentiment

1 - On Motley Fool this is the least followed of the 3 but there are 683 readers voting in

2 - CAPS members vote 449 to 62 that the stock will beat the market

3 - The more experienced All Stars vote 157 to 15 in agreement


Wal-Mart (WMT) seems to have the best prices although recently a local newspaper went to both Wal-Mart and Target Super Stores and proclaimed target the winner on food items.  I personally find the Target stores in my area cleaner and better laid out than the Wal-Mart stores.

Wal-Mart Stores, Inc. (WMT)  is the world's largest retailer. They are engaged in the operation of mass merchandising stores, which serve their customers primarily through the operation of three segments, which are the Wal-Mart Stores segment, the SAM'S Club segment and the International segment.


Technical Factors:

1 - 16% Barchart technical sell signal

2 - Trend Spotter sell signal

3 - 4 new highs and up 2.46% in the last month

4 - Relative Strength Index 56.84%

5 - Trades around 52.95 with a 50 day moving average of 53.35

Fundamental Factors:

1 - Wall Street brokerage analysts have published 13 strong buy, 4 buy and 12 hold recommendations

2 - Sales are projected to increase by 4.30% this year and 5.00% next year

3 - Earnings are estimated to increase by 9.10% this year, 9.90% next year and 10.30% annually for the next 5 years

General Investor Sentiment:

1 - On Motley Fool this is one of the most widely followed stocks with 8330 readers making a opinion

2 - CAPS members vote 6099 to 758 that the stock will out perform the market

3 - The more experienced All Stars agree by a vote of 1367 to 106

Target (TGT) is actually my favorite from a shopping stand point.  The stores are cleaner, the merchandise suits my tastes and they are in shopping centers with other stores.


Target Corporation (TGT) operates large-format general merchandise and food discount stores in the United States, which include Target and SuperTarget stores. They offer both everyday essentials and fashionable, differentiated merchandise at exceptional prices. Their ability to deliver a shopping experience that is preferred by their guests is supported by their strong supply chain and technology infrastructure. They operate as a single business segment. Their credit card operations represent an integral component of their core retail business. They also operate a fully integrated online business, Target.com. Although Target.com is small relative to their overall size, its sales are growing at a much more rapid pace than their in-store sales, and it provides important benefits to their stores and credit card operations.


Technical Factors:

1 - 16% Barchart technical sell signal

2 - Trend Spotter sell signal

3 - 1 new high but down 1.65- for the last month

4 - Relative Strength Index 48.82%

5 - Trades at 50.88 which is below its 50 day moving average of 52.06

Fundamental Factors:

1 - Wall Street brokerage analysts have published 10 strong buy, 9 buy and 7 hold recommendations

2 - Sales are projected to increase by 4.10% this year and 4.80% next year

3 - Earnings are estimated to increase by 9.80% this year, 9.90% next year and 12.19% annually for the next 5 years

General Investor Sentiment:

1 - This stock has more than half the following on Motley Fool as Wal-Mart but 3 times the following of TJX with 3043 readers having an opinion

2 - CAPS members vote 2202 to 218 that the stock will beat the market

3 - The more experienced All Stars agree 578 to 45 

Well, I like to shop at Target but shopping doesn't make any money.  And I'll let the tape call the winner.  The winner of the tape for the last 6 months is:


TJX by a long shot -- TJX up 15.02%, WMT down 1.60%, and TGT down 4.97%


Jim Van Meerten is an analyst for  Marketocracy Capital Management.  He shares his knowledge and experience from over 40 years of investing in stocks, mutual funds and ETFs onBarchart.com  in his daily blog -- Barchart Portfolio Blogs.

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