How to Pick Winning Retail Stocks, Pt. 1

This column was originally published on RealMoney on June 1, 2007 at 10:00 a.m. ET. It's being republished as a bonus for TheStreet.com University readers. For more information about subscribing to RealMoney, please click here.

I've been following retail stocks for my regular column on RealMoney since November. I'm happy to say that out of the 19 companies I've written about, 17 are in positive territory. Leading the way are:

• Dollar General(DG Quote) (December 2006) with a rise of 37% since I wrote about it;
• GameStop(GME Quote) (January), up 36%;
• Polo Ralph Lauren (RL Quote) (also December 2006), gaining 17%; and
• Yum! Brands(YUM Quote) (February), plus 16%.

Meanwhile, the S&P 500 is up 10% and the Retail HOLDRs(RTH Quote) -- a good proxy for the retail sector -- is up 7.1% since last November.

Of course, not all the picks have worked out. We stopped following January pick Circuit City(CC Quote) after it continued to disappoint. And I'm still waiting for American Eagle Outfitters(AEO Quote), which I wrote about in November 2006, to come around. ...