Mall Anchors Macy's, Kohl's, Nordstrom Rated Buy

NEW YORK (TheStreet) -- Retail stores that are mall anchors reported their quarterly results in the days just following the Presidential Election on Nov. 7 and Nov. 9. Three beat their earnings estimates and two missed.

Today I will profile these stocks and provide updated "buy-and-trade" strategies including for some of the other retailers that reported earnings this week.

First a quick update on Home Depot ( HD) which reported results pre-market on Tuesday. HD beat earnings estimates on both the top and bottom line, and the stock set a new multi-year high at $64.44.

Yesterday in Retail Earnings at the Mall I indicated that closes above my monthly pivot at $62.76 indicates upside is to its all-time bubble top of $70.00 set in April 2000. HD did not hold onto those gains and the close on Wednesday was below $62.76 which indicates risk to my quarterly value level at $58.83. In hindsight booking profits between $62.76 and $64.44 was prudent buy-and-trade strategy.

At www.ValuEngine.com we have three retail-oriented sectors. Consumer discretionary is 7.0% undervalued, consumer staples is 10.0% overvalued and retail-wholesale is 2.8% overvalued.

Here are my buy-and-trade profiles for the mall anchors:

Dillards ( DDS) ($82.50): Has a buy rating and is 12.0% overvalued. The stock traded up to a multi-year high of $86.71 on Nov. 8 in anticipation of a positive earnings report. The stock had a significant beat on EPS earning 96 cents well above the 75 cents a share estimate, but that was priced in as the stock fell to $82.18 yesterday. My monthly value level is $77.78 with a quarterly risky level at $85.23, which was tested at that pre-earnings high. The weekly chart profile shifts to negative on a weekly close below the five-week modified moving average at $78.44.

JC Penny ( JCP) ($16.89): Has a hold rating and traded lower on Nov. 9 on a significant earnings miss with an EPS loss of 93 cents compared with a 6 cents a share loss estimate. My monthly value level is $14.16 with a semiannual pivot at $18.18 and weekly risky level at $19.32. Yesterday's low at $16.89 is a multi-year low. The March 2009 low was $13.71. The weekly chart profile has been negative since the week of Oct. 26.

Nordstrom ( JWN) ($54.11): Has a buy rating and traded up to $58.40 on Election Day then reported quarterly results Nov. 8. EPS missed estimates by one cent at 71 cents a share. The stock traded down to $53.96 on Nov. 12 compared with the 200-day simple moving average at $53.74. My semiannual value level is $45.56 with a monthly pivot at $55.12 and my annual risky level at $58.83. The weekly chart shifted to negative last week with a close below the five-week MMA at $55.42.

Kohl's ( KSS) ($51.23): Has a buy rating and traded up to its 2012 high at $55.25 Nov. 1. Earnings were a beat of four cents at 91cents a share. This was priced in as shares slumped to a post earnings low of $50.88 on Tuesday. My quarterly value level is $48.16 with a monthly pivot at $50.58 and a semiannual risky level at $54.42. The weekly chart profile is negative with the stock between its 200-week SMA at $50.29 and its five-week MMA at $52.05.

Macy's ( M) ($38.90): Has a buy rating and traded up to $41.98 on Nov. 7 in reaction to a 7 cents a share beat at 36 cents a share. Shares then declined to $38.30 on Tuesday. My monthly value level is $28.27 with a weekly pivot at $38.98 and quarterly risky level at $40.61. The weekly chart ended last week negative with the five-week MMA at $39.14.

Other Earnings Reactions

Limited Brands ( LTD) ($46.60): Traded up to $48.20 during Wednesday's session testing my monthly risky level at $48.09 where investors could have reduced holdings. The stock traded down to $46.20 in after-hours trading after reporting a one-cent a share earnings beat at 26 cents a share. My semiannual value level is $40.46 with a weekly pivot at $46.81. The weekly chart profile is negative with the five-week MMA at $48.02 and the 200-week SMA at $30.50.

Williams-Sonoma ( WSM) ($45.11): Traded up to $46.45 Wednesday morning then traded down to $44.70 in after-hours trading despite a 4-cent a share beat of 49 cents a share. The stock could open below its 50-day SMA at $45.03 this morning targeting my quarterly pivot at $44.38. The weekly chart profile is overbought with the five-week MMA at $45.05 and the 200-week SMA at $29.51. A close this week below $45.05 is a technical downgrade to neutral, and the profile could be negative in another week given declining momentum.

PETsMART ( PETM) ($64.85): Traded up to $66.78 Wednesday then down to $64.85 at the close pre-earnings. Following a double-beat on EPS and revenue the stock popped to $68.75 in after-hours. Earnings beat estimates by 12 cents a share at 75 cents a share. My semiannual value level is $62.19 with a weekly pivot at $66.62 and quarterly risky level at $72.43. If this pop holds, the weekly chart shifts to neutral from negative given a close on Friday above the five-week MMA at $67.12.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.

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