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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (59284)	3/26/2017 9:51:38 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78476

I agree with respect to retail. I'd rather invest in Reits and own the physical stores. There is risk in this business as well, but at least one does not have to bet on individual retail stocks, and most Reits don't have issues to replace failing stores with others ones that even pay better rent.

To: Shane M who wrote (59284)	3/27/2017 2:48:50 PM
From: Micah Lance	1 Recommendation Recommended By staring Read Replies (3) \| Respond to of 78476

I've recently been thinking about the same with retail. Retail can suck you in with valuation, but big trends are working against them I agree 100%. Graham mentioned how Amazon (AMZN) can come in and disrupt just about any business in retail and I agree with his assessment. I was in Bed Bath and Beyond (BBBY), but sold out on the initial trump bounce after rethinking my thesis. Amazon's supply chain is pretty incredible and I don't see any reason why they couldn't come in and take out companies like a JCP or Macys (M). IF I were to go into the sector, then I would look for individual clothing retailers or something like that. Maybe like a Ralph Lauren (RL) or a Michael Kors (KORS). I think these will survive on some basis as they are designing clothes etc instead of being stores like Macys that sells other companies clothing lines. I could easily see Amazon coming in and running a company exactly like Macys but with tighter controls and better supply chain and selling stuff like RL and KORS. The Grahamite in me wants to see them get beaten down a bit more before I jump in. I think if the consumer really slows then there will be some real pain in retail which could present a really nice entry point.

To: Shane M who wrote (59284)	3/30/2017 11:46:12 AM
From: Paul Senior	Read Replies (3) \| Respond to of 78476

DG. Ok, I'll follow you with a buy of Dollar General. For me: p/e: low (value) p/sales: relatively high (negative) p/stated book: relatively high (negative) multi-year revenue growth: positive last quarter: positive (imo) Roe/pe: high roe; relatively low stock price. Greenblatt model Negative view (Barron's 3/23): (Credit Suisse)Analyst Edward Kelly downgraded the discount retailer to underperform and cut his price target from $68 to $62 a share, arguing that the company’s goal of opening 1,000 stores a year and growing earnings by 10% seems “unreasonable.” "DG’s long-term growth algorithm looks unachievable, as increasing competition and rising cost pressures should weigh on earnings for some time. While Q4 beat low expectations, the update highlighted underlying concerns related to sales momentum, margin sustainability, and the logic behind ramping openings to 1,000 stores per year. We believe DG will ultimately be forced to reset expectations and disappoint a street consensus that has assumed a reacceleration to 10% annual growth after a flat 2017." At a recent $69.23, Dollar General’s stock price climbed 2.1% in recent market action. The stock is down almost 20% over the past 12 months." In my view too, customers go to the store to buy inexpensive stuff which they wouldn't order on-line. Company has 13,000 stores, so convenient location would be a positive. Apparently company has entered the grocery business, and that's not going as well as expected? I'll buy here, and bet the overall business is still remains pretty good, and stock price will be higher (revert to median p/e) within a couple of years. So many good or good/excellent companies trading at what seem to me to be high prices (evidenced by being near 12-mo or multiyear highs), that pickings are slim. Here's one quality company though, that while it may have some problems (or may not), it's at least trading near lows (stock price and p/e). And that may offer a value opportunity. Jmo, although I've been wrong many, many times.