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Taking a Cautious Approach to Investing in the Retail Space: R.J. Hottovy, Senior Retail Analyst, Discusses the Shifts in Consumer Spending Within the Space and His Recommended Stocks

67 WALL STREET, New York - September 3, 2013 - The Wall Street Transcript has just published its Retail Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Brick-And-Mortar Versus Online Retail Sales - Cautious Consumer Spending - Strong Secular Growth in E-Commerce - Competition From Big-Box Retailers

Companies include: The Home Depot, Inc. (HD), Lowe's Companies Inc. (LOW), Wal-Mart Stores Inc. (WMT), The TJX Companies, Inc. (TJX), Ross Stores Inc. (ROST), Petsmart Inc. (PETM), Amazon.com Inc. (AMZN), Costco Wholesale Corporation (COST), J. C. Penney Company, Inc. (JCP), Kohl's Corp. (KSS), Macy's, Inc. (M) and many more.

In the following excerpt from the Retail Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Within your coverage, who are some of the names that you like right now and why do you like them?

Mr. Hottovy: That should not be a difficult question, but right now it is hard for me to give you a great answer on that. We had liked the home improvement stocks for a while, but now we think that the market's overshot the fundamentals a bit. We do think that there is some momentum left in most of those names through the back half of the year, but also think that they're fundamentally slightly overvalued. We think the teen retailers are going to be still struggling for the next couple of quarters.

There are some names in the specialty categories, like PetSmart (PETM), that we like. Those are names that we still think are undervalued and think that they still represent something consumers are interested in spending money on. There is an inherent need for some of those products that should keep them somewhat protected from potential market volatility in the back half of the year.

A name like Amazon (AMZN) we still like, too. We think Amazon is slightly undervalued. We think that they continue to be market share gainers from traditional bricks and mortar, and even though profitability is still a question mark there, we do think the company has a strong model and will have good operating margins over the next several years.

TWST: You mentioned Amazon. Do online retailers generally share the same trends as traditional brick-and-mortar retailers?

Mr. Hottovy: I think you will see some of the same directional things, but I still think that you're seeing a pretty massive channel shift in terms of where consumers are spending. I think that Amazon's ability to be the world-class provider in many cases and in many product categories makes them an attractive player in this environment where you do have that lower- and middle- income...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.