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.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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