Investors looking for a retail survivor should consider buying shares of Kohl’s Corporation as the stock appears too cheap to ignore and is trading just above its monthly value level.
Kohl’s stock set its post-crash of 2008 low of $24.28 during the week of Nov. 22, 2008, and by the week of Aug. 7, 2009, it had rebounded to its 200-week simple moving average, or the “reversion to the mean,” at $52.61. This average was a magnet for a long time as the stock moved sideways around its “reversion to the mean” until the week of Aug. 1, 2014, when the 200-week simple moving average was $51.16. (See also: Kohl’s to Expand Stores and E-Commerce, Plans Rightsizing.)
The second half 2014 was a positive one for retailers, as the idea to buy online had not yet taken a significant hold among consumers. Kohl’s set its all-time intraday high of $79.60 during the week of April 10, 2015, and it has been downhill since then. Once the stock declined 20% from this high, it lost its desirability as a core portfolio holding, making it a stock to trade based upon its technical charts, fundamentals and key trading levels. This is likely the right time for a trading opportunity.
Analysts expect Kohl’s to post earnings per share of 71 cents when it reports quarterly results before the opening bell on Thursday. The stock is cheap, with a P/E ratio of 10.44 and a generous dividend yield of 5.17%. Traders should keep an eye on guidance, as Kohl’s has a strategic alliance with Amazon as a hub for returns at a limited number of stores in busy urban locations. Within these locations, the retailer has started to sell Amazon devices. This begs the question of whether Amazon will purchase Kohl’s. (For more, see: Can Kohl’s Extended Tie-Up with Amazon Drive Store Traffic?)
Kohl’s has a cheap P/E ratio, a solid dividend yield and is a hub for Amazon returns in some large markets. …read more
Read more here: Kohl’s Stock Too Cheap to Ignore Given Amazon Link
Category: KSS, AMZN