Retailers at Bargain-Basement Values
This column was originally published on RealMoney on June 27 at 2:04 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.
The retail sector, as a whole, is currently 9.1% overvalued, but there are eight specialty retailers that have fallen to bargain basement-valuations at 20% or more undervalued, according to my model.
The share prices of these eight retailers have been discounted by about 25% to 50% off their 52-week highs -- giving investors the opportunity to consider buying weakness now -- and to my value levels.
The stock prices are sliding at companies ranging from luxury-goods provider
Coach
(COH)
to discounter
Dollar General
(DG) - Get Dollar General Corporation Report
. Also slumping are the shares of
Chico's FAS
(CHS) - Get Chico's FAS Inc. Report
and
Pacific Sunwear
(PSUN)
, as well as
TheStreet Recommends
Urban Outfitters
(URBN) - Get Urban Outfitters Inc. Report
.
The stocks of
Harman
(HAR)
,
RadioShack
(RSH)
and
Petco
( PETC) all clearly reside in the doghouse, too. The trading levels for these stocks are below, followed by a table showing my model's full analysis of each stock.
Chico's: Add to positions on weakness to my annual value level at $23.61.
Coach: Add to positions on weakness to the 200-week simple moving average (SMA) at $21.99, or on a buy stop given a weekly close above the five-week MMA at $30.37.
Dollar General: Add to positions on a buy stop given a weekly close above the five-week MMA at $15.71.
Harman: Add to positions on weakness to my annual value level at $76.57.
Petco: Add to positions on weakness to my monthly value level at $15.26.
Pacific Sun: Add to positions on a buy stop given a weekly close above the 200- week SMA at $20.39.
Radio Shack: Add to positions on a buy stop given a weekly close above the five-week MMA at $16.12.
Urban Outfitters: Add to positions on weakness to the 200- week SMA at $15.38.
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Richard Suttmeier is president of Global Market Consultants, Ltd., and chief market strategist for Joseph Stevens & co., a full service brokerage firm located in lower Manhattan. Early in his career, Suttmeier became the first U.S. Treasury Bond Trader at Bache. He later began the government bond division at L. F. Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the technicals of the U.S. capital markets. He also has been U.S. Treasury Strategist for Smith Barney and chief financial strategist for William R. Hough. Suttmeier holds a bachelor's degree from the Georgia Institute of Technology and a master's degree from Polytechnic University.
