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JimVanMeerten (62.88)

Ross Stores is a buy

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May 16, 2011 – Comments (1) | RELATED TICKERS: ROST

While screening on Barchart for growth stocks hitting the most frequent new highs Ross Stores (ROST) was near the top of the list this morning.  As disposable income increases purse strings will loosen but shoppers will still look for bargains at off price stores like Ross.  Ross has been very good at inventory management and keeping the shelves loaded with new merchandise to encourage return shoppers.  The investors have been enticed with an aggressive stock buy back program.  I'd buy the stock on its price momentum alone.

Ross Stores, Inc. (ROST) operates a chain of off-price retail apparel and home accessories stores, which target value conscious men and women between the ages of 25 and 54 in middle-to-upper middle income households. The decisions of the company, from merchandising, purchasing and pricing, to the location of its stores, are aimed at this customer base. The company offers brand name and designer merchandise at low everyday prices, generally below regular prices of most department and specialty stores.

Factors to Consider

Technical Factors:

1 - 96% Barchart technical buy signal

2 - Trend Spotter buy signal

3 - Above its 20, 50 and 100 day moving averages

4 - 14 new highs and up 15.56% in the last month

5 - Relative Strength Index 80.19% and climbing

6 - Trades around 82.64 with a 50 day moving average of 72.65

Fundamental Factors:

1 - Wall Street analysts have released 4 strong buy, 2 buy, 12 hold and 2 negative reports

2 - Sales are projected to increase by 7.10% this year and 7.30% next year

3 - Earnings forecasts are all double digit with an increase of 15.10% this year, 11.30% next year and 13.68% annually for the next 5 years

General Investor Sentiment:

1 - On Motley Fool 344 readers have expressed an opinion on this stock

2 - CAPS members voted 250 to 4 that the stock will beat the market

3 - The more experienced All Stars vote 83 to 7 for the same result

Summary:  Discount department store are still drawing in shoppers and stock buy back programs attract investors.  With a projected growth in sales and a double digit growth in earnings expected  Ross Stores (ROST) deserves a place on your watch lists.

1 Comments – Post Your Own

#1) On May 16, 2011 at 1:52 PM, buffalonate (94.69) wrote:

Thanks I hadn't heard of this one.  I have been looking for smallish well-run retail stocks to buy and this looks like a good value.  I found some really good retail stocks in my search.  Check out JOSB, FOSL, RUE 21.  I invested in JOSB several years ago and it is up over 140% since I bought it and it is still a good investment. 

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