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JimVanMeerten (61.84)

Target has a bullseye for double digit EPS grwoth

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October 11, 2010 – Comments (0) | RELATED TICKERS: TGT

Target (TGT) is my S&P 100 pick of the day.  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.

The company wide retro-fit to include groceries at all location is well underway.  A stock buy back plan should also increase shareholder value.  Although sames store sales are up only 2.80% and this years sales are only expected to be up 3.70% and next year only by 4.70% ,the real story is in earning projections.  Wall Street analysts estimate earnings per share growth of 17.90% this year, 13.10% next year and continue annually at a rate of 12.90% for the next 5 years.

The technical indicators on Barchart have noticed the stocks price momentum with a 100% technical buy signal.  The stock has been up in all 5 of the last sessions and traded at 54.85 which is above its 50 day moving average of 52.82.  The Relative Strength Index is 51.88% and rising.

The stock is as popular with investors as it is with shoppers and the CAPS members on Motley Fool vote 2,129 to 224 that the stock will beat the market with the All Stars in agreement by a vote of 626 to 50.  Fool notes that Wall Street columnists have been writing positive articles 21 to 1.

If you need a large retailer for your core holdings consider that Target:
1 - Is a Wall Street darling with brokerages publishing 19 buy and 5 hold recommendations for their customers based on a 5 year projection of double digit earnings increases

2 -  Has a 100% Barchart technical buy signal

3 -  Shoppers as well as investors give the company a vote of confidence Jim Van Meerten is an advisor to Marketocracy Capital Management who uses his model portfolios not only to manage their mutual funds but also their clients Separately Managed Accounts. You can read his blogs about those model portfolios and investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.


Disclosure: Jim Van Meerten through Marketocracy Capital Management has an interest in the stocks mentioned in this blog.

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