NEW YORK (TheStreet) -- The retail sector has been disappointing to many investors, although there are still some names to favor on the long side.
Stephanie Link, co-manager of the Action Alerts PLUS portfolio, told TheStreet's Lindsey Bell that investors don't know where to turn after disappointing results from Macy's (M) earlier in the week, followed by similar results from Wal-Mart (WMT) and Kohl's (KSS).
Link suggested investors focus on companies that have one or more of these qualities: recurring revenue streams, strong balance sheets, ability to expand and grow and a focus on restructuring.
Consumers, particularly in the middle and upper classes, seem to be spending on home goods rather than apparel. This is one reason why the AAP portfolio invests in Costco Wholesale (COST), as well as for its recurring revenue stream and strong comp numbers.Under $50 per share, TJX Companies (TJX) is also on her radar. The company boasts square footage growth, exposure to home goods and international and domestic opportunities with its Marmaxx brand. She added that in the low-$50 range she likes Coach (COH) for its pending restructuring efforts and Nordstrom (JWN) in the low- to mid-$50 range. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV