|Bid||0.0000 x 3000|
|Ask||0.9549 x 1100|
|Day's Range||0.9102 - 0.9841|
|52 Week Range||0.5300 - 2.0500|
|Beta (3Y Monthly)||2.63|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 13, 2019 - Nov 18, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||0.86|
Moody's rating action reflects a base expected loss of 5.7% of the current pooled balance, compared to 4.9% at Moody's last review. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.
Director Lisa Payne made her first open-market purchase, buying 230,000 shares of the embattled department-store chain. She joins several other insiders buying J.C. Penney stock, including CEO Jill Soltau.
Nordstrom (NYSE:JWN) stock has suddenly moved into rebound mode. After hitting a multi-year low of around $25 per share, the stock has surged over the last few weeks, taking Nordstrom stock to almost $35 per share.Source: Jonathan Weiss / Shutterstock.com JWN remains far away from delivering impressive profit growth, and its low multiple may not persuade investors to buy after the recent run-up. Still, it has become a lucrative choice for an unexpected group -- dividend investors. Nordstrom's Amazing TurnaroundNordstrom stock has seen an impressive run since it announced an earnings beat on Aug. 21. The report began a rally that has taken JWN stock higher by about 40% in less than a month. Positive developments on trade talks with China have further fueled the rally.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Big IPO Stocks From 2019 to Watch Yes, amid the Amazon (NASDAQ:AMZN) threat, JWN and peers such as JCPenney (NYSE:JCP), Kohl's (NYSE:KSS) and Macy's (NYSE:M) have faced challenges over the last few years. As late as 2015, Nordstrom stock traded at over $83 per share. However, fears of Amazon and factors such as the trade war have helped send JWN to recent lows of around $25 per share.While the competition spelled bankruptcy for Sears (OTCMKTS:SHLDQ) and could for JCPenney, Nordstrom has found a way to remain relevant in a retail environment increasingly moving online. As a result, we now see a turnaround in Nordstrom stock.Even with the huge run-up, the forward price-to-earnings ratio stands at about 10.4. That does not seem expensive. Also, it has maintained an average P/E ratio of around 18.7 over the previous five years and such multiples usually signal a strong long-term buy. Dividends Have Become the Draw for JWNStill, looking at profits, one has to wonder if Nordstrom stock will face more permanent multiple compression. Analysts predict profits will shrink by 8.6% this year. For next year, Wall Street forecasts an increase of only 3.3%. It also predicts long-term earnings increases of 3.68% per year over the next five years. Given the slow pace of profit growth, the low P/E ratio alone would not persuade me to buy Nordstrom stock.However, I see a reason for dividend investors to buy stock in JWN. The silver lining in the long-time decline in JWN stock is the rising dividend yield. As late as 2014, JWN investors earned 1.22% in dividends. At that time, investors received $1.32 per share. The annual payout now stands at $1.48 per share and has remained at that level since 2016.Still, despite a modest increase, the yield has now risen to just over 4.3%. And it remains there despite the massive increase in the stock over the last month.To be sure, this payout presents somewhat of a burden. With a dividend payout ratio of 49.33%, the payout claims nearly half of the company's profits. Still, with growth returning, the company has no reason to put the stock at risk by cutting the dividend. Moreover, even with only 3%-plus profit growth, the payout ratio will fall over time. Final Thoughts on Nordstrom StockNordstrom stock should continue to rise over time, but not for a reason many would expect. Yes, the forward P/E of 10.4 looks cheap, both by S&P 500 and even by JWN standards. However, with profit growth expected to remain in the low-single-digits for years into the future, the P/E may not return to long-term averages of around 18.7.Still, the long-term decline in Nordstrom stock has led to an unexpected result -- a high dividend yield. JWN has become a well-suited vehicle for producing a cash return exceeding both the S&P 500 and most any bank deposit. Moreover, with a P/E ratio that remains low, they should receive the added benefit of a rising stock price.For retail investors wanting both growth and income, JWN stock may have just become the equity of choice.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Buy Nordstrom Stock, But Not Because of Its Low Valuation appeared first on InvestorPlace.
GameStop (GME) shares have been sliding after the video game retailer reported disappointing Q2 earnings after the closing bell on Tuesday.
Closing out the first week of September, the benchmark indices finally started to gain some positive momentum. Although encouraging in the nearer term, overall, I don't find the moves that impressive. With Wall Street lacking the holistic energy to push the indices to fresh heights, I believe investors are better served acting defensively. As such, retail stocks to buy provide an intriguing mix of protection and upside potential.But at first glance, retail stocks seem like a sector to avoid like the plague. If our economy stumbles into a recession - and the latest jobs report suggests this is a very real possibility - the natural instinct is to curb unnecessary spending. Thus, it's no surprise that many discretionary retail stocks, such as Macy's (NYSE:M) and JC Penney (NYSE:JCP) have suffered volatility.That said, this segment isn't about people making superfluous purchases on a whim. Instead, many retail stocks to buy enjoy secular revenue streams. For instance, no matter what goes on in the economy, people have to live and work. Therefore, retailers who specialize in core products, accessories or apparel may see a spike in interest.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMoreover, some retail stocks might thrive in a recession. During a bull market, confident consumers will probably eschew discount stores for something higher brow. But in a recession, discount stores might see customers that they normally wouldn't see. * 7 Stocks to Buy In a Flat Market If we do have a downturn, it's important not to lump all retail stocks together. Here are seven stocks to buy if we encounter choppy waters. Dollar Tree (DLTR)Source: Shutterstock Among discount retail stocks to buy, Dollar Tree (NASDAQ:DLTR) is one of the most well-known. From household goods to cleaning products to various food items, everything you see costs a buck. Not only that, DLTR stock has a proven track record for performing brilliantly during distressed economic times.For example, since 2008, the market value for DLTR stock has increased roughly tenfold. Additionally, we could see even bigger gains if we suffer another downturn. Recently, Dollar Tree upgraded its guidance for full-year earnings per share from a range between $4.77 to $5.07 to between $4.90 to $5.11. Management also narrowed down its expectations for full-year revenue.Much of this enthusiasm has to do with same-store sales exceeding analysts' forecasts. While I'd tactically like to wait to see if DLTR stock will correct some of its extreme bullishness, in the longer run, I'm confident in the upswing. This is a company that's going to give customers exactly what they need at a price they can afford. Dollar General (DG)Source: Jonathan Weiss / Shutterstock.com While several publicly traded companies suffered a bloody month of August, Dollar General (NYES:DG) went completely against the grain. Last month, DG stock gained a little over 18%. Even in September, Dollar General has so far returned nearly 4%.And on a year-to-date basis, DG stock has veritably skyrocketed, up over 51%. Even better for stakeholders, the surge in market value appears fundamentally justified.As with Dollar Tree, Dollar General increased its earnings and revenue expectations for the year. Also, the discount retailer experienced an unexpectedly strong lift in same-store sales. That it was also able to beat expectations for its most recent earnings report gave investors little choice: it was time to buy into DG shares, which has proven to be among the most resilient of discount retail stocks. * 10 Battered Tech Stocks to Buy Now Of course, with such massive enthusiasm, I think waiting a little bit for a discount (ironically enough) on DG stock is wise. But if you do see a dip, the longer-term narrative is very intriguing, especially in a recession. Kroger (KR)Source: Jonathan Weiss / Shutterstock.com Normally, most folks wouldn't consider Kroger (NYSE:KR) as a name among discount retail stocks to buy. As one of the top grocers in the country, Kroger offers a wide variety of products, including premium labels. Plus, I can't help but notice that some of their stores are located in very swanky neighborhoods.That said, if we fall into an economic slump, KR stock will act like a discount retailer. Primarily, I say this because Kroger will almost surely soak up demand from the restaurant industry. While restaurants won't fade entirely, customers become more cost-conscious in a downturn. There's no point in spending on sometimes outrageous premiums when you can enjoy good food from home. Undeniably, this is a positive for KR stock.Further, Kroger has its own in-house food and beverages brands. Sure, you can call this high-level knockoffs. But I must admit that Kroger-branded products are very tasty. For instance, I buy their potato chips, which are cheaper, larger sized, and taste just as good as the competition. In a recession, that is the formula for success, which is why you should consider KR stock. Five Below (FIVE)Source: Jonathan Weiss / Shutterstock.com Although the concept of discount retail stocks to buy during a market decline makes sense, I must concede one thing: at the consumer level, most discount retailers are depressing affairs. However, Five Below (NASDAQ:FIVE) has completely changed perceptions about thrift shops. With its bright, bold colors and compelling marketing campaigns, FIVE stock has serious potential.Part of that comes from its core demographics. According to the company's website, Five Below is the only retailer dedicated to teens and tweens. Of course, that usually entails opening up their parents' wallets. Typically, this endeavor results in the usual teen-parent conflict. But with prices so low - everything is between $1 to $5 - this is a rare area of consensus, supporting the case for FIVE stock. * 10 Stocks to Sell in Market-Cursed September Furthermore, I'm very impressed with the company's holistic approach to their marketing and branding message. Not only do they have comprehensive social media coverage, but they're actively engaging their accounts. For instance, their YouTube channel features celebrity guests that incorporate Five Below-sold products into the media presentations. That kind of smart thinking will probably see FIVE stock perform well in rough economic waters. Ross Stores (ROST)Source: Andriy Blokhin / Shutterstock.com At first glance, Ross Stores (NASDAQ:ROST) seems like an anomaly among the apparel-based retail stocks. Just take a look at well-known apparel makers, such as Gap (NYSE:GPS) or Guess (NYSE:GES). Their shares have incurred significant volatility, marked by bouts of extreme wildness. In sharp contrast, ROST stock has enjoyed a relatively stable move northward.But in the context of the current economic uncertainty, I'm not surprised that ROST stock has performed well this year. Even with the U.S.-China trade war threatening to hike apparel prices, the reality is that people need clothes. And while Ross will certainly take a hit to their margins, other non-discount retailers will suffer worse.With that said, I think you can make a tactical argument not to dive too deeply right now. Currently, ROST stock is sitting on over 35% YTD. If the broader markets get jittery, ROST is liable for a correction. Still, in the long run, I'd pay very close attention to this name if economic conditions don't improve. Ollie's Bargain Outlet (OLLI)Source: Shutterstock A few years back when I started writing about Ollie's Bargain Outlet (NASDAQ:OLLI), it was on a roll. Growth was meteoric, which drove up the market value of OLLI stock. When you consider that shares were priced under $20 for much of 2015, this is one of the most explosive retail stocks.But in recent weeks, explosive has a different connotation. Now, investors are no longer considering Ollie's as one of the stocks to buy, but instead to dump. Late last month, the company released its Q2 earnings report, and the news wasn't encouraging.Although the discount retailer reported double-digit sales growth, it witnessed a deceleration of same-store sales. Management blamed it on new store introductions' cannibalization effect. However, Wall Street saw the decline as Ollie's inability to perform under a strained environment. As a result, investors pummeled OLLI stock. * 7 Worst Stocks That Flopped This Earnings Season Possibly heading into a recession, I understand why investors are nervous. However, let's keep in mind that the retailer is called Ollie's Bargain Outlet, not Olivier's Chateau of Overpriced European Trinkets. If we have a downturn, OLLI stock has the potential to outperform. And sure enough, it's now on a steep discount. Big Lots (BIG)Source: Jonathan Weiss / Shutterstock.com Big-box retailer Big Lots (NYSE:BIG) probably hasn't been included in a list of retail stocks to buy for some time. Frankly, that's for good reason. In January of last year, the markets priced BIG stock into the stratosphere at over $60. Today, shares are trading hands for less than $25.Unfortunately, Big Lots consistently delivered poor earnings results throughout 2018. Not only that, management cut guidance, which exacerbated the issue. Throw in an executive shuffle with a new CEO, and the retailer looked more frazzled than confident about tackling a new challenge. As a result, BIG stock took it on the chin.As it stands, BIG stock is easily one of the most speculative retail stocks available. However, I can't help but feel a recession could actually help turn things around. Big Lots has many of the same characteristics of popular Costco (NASDAQ:COST). The one exception, of course, is that Big Lots has no membership dues, and their rewards program is also free.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post 7 Discount Retail Stocks to Buy for a Recession appeared first on InvestorPlace.
Another one bites the dust. In early September, discount retailer Fred's (NASDAQ:FRED) announced that it was filing for Chapter 11 bankruptcy protection and shuttering all of its stores. Fred's joins a long list of retailers that have declared bankruptcy over the past several years as technology has dramatically and irreversibly altered the retail landscape. That list includes once loved retailers like Barneys, Sears and Toys "R" Us, among many, many more.Over the next several years, this list will only get longer. Looking at the retail scene, while the broad outlook for physical and digital retailers remains positive, there are a handful of retailers out there that are only a few quarters away from shuttering their doors.These are retailers that were: 1) slow to adapt to the e-commerce shift, 2) have been losing share and relevance for the past few years, 3) are now operating with depleted resources and simply don't have the financial firepower to make the necessary changes and enhancements to their business to survive, and 4) are holding a huge pile of debt.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Sell in Market-Cursed September Ultimately, if a retailer checks off those four boxes, then that's probably a retail stock heading for the graveyard -- meaning it's a retail stock you want to sell.With that in mind, let's take a look at six retail stocks to sell on their way to bankruptcy. Retail Stocks to Sell: J.C. Penney (JCP)Source: Supannee_Hickman / Shutterstock.com First up, we have forgotten mall retail giant J.C. Penney (NYSE:JCP).At one point in time, J.C. Penney was at the heart of the American retail landscape, back when consumers did all of their shopping at malls. Times have changed since then. Namely, consumers have migrated to off-mall and online retail channels. J.C. Penney has been slow to adapt to those changes. They didn't build out an e-commerce business as quickly as they needed to. They didn't develop omni-channel capabilities as quickly as they needed to. And, they didn't update their stores or offerings in a way that they needed to.As such, the once all-important mall retail giant has become largely irrelevant with negative comps and falling margins. J.C. Penney will remain irrelevant for the foreseeable future because this company doesn't have enough cash (only $175 million in cash on the balance sheet) nor does the business produce enough cash (negative free cash flow year-to-date) to allow management to invest that much -- if anything -- back into the business.Further complicating things, there's over $5 billion in total debt sitting on the balance sheet. Thus, any cash this company does produce is going to have to go towards paying off debt.There isn't much to like about JCP here. You have a depressed and forgotten retailer with rapidly depleting resources and a bunch of debt -- that combination ultimately implies that bankruptcy is coming soon. Ascena Retail (ASNA)Source: Jer123 / Shutterstock.com Lesser known than J.C. Penney but in just as much financial trouble, women's apparel retailer Ascena Retail (NASDAQ:ASNA) could easily wind up bankrupt within the next few quarters.Ascena is the parent company behind women's apparel brands like Ann Taylor, LOFT, Lou & Grey, Lane Bryant, Catherines and Justice. Those brands simply aren't all that important in the modern women's apparel retail landscape. They aren't very differentiated and they have a ton of competition. As such, it should be no surprise that over the past several years, Ascena's comparable sales and margin trends have been sharply negative.The big problem here -- as is the case with J.C. Penney -- is that this company doesn't have the resources to improve its product portfolio. There is only $100 million in cash on the balance sheet against the backdrop of over $1.3 billion in long-term debt. Further, cash flow is negative year-to-date, comps are still negative and gross margins are still dropping. Thus, this company is not nor does it project to produce sizable cash any time soon. * 7 Stocks to Buy In a Flat Market An inability to produce cash plus over $1.3 billion in leverage equals looming bankruptcy. That's why ASNA stock has been so beaten up, and why it will remain depressed for the foreseeable future. Stage Stores (SSI)Source: WhisperToMe via Wikimedia CommonsAnother department store operator which finds itself on this list of retail stocks on the verge of bankruptcy is Stage Stores (NYSE:SSI).The story at Stage Stores is very similar to the stories at J.C. Penney and Ascena. Broadly speaking, you have a retailer that accumulated a lot of debt to fuel expansion during its growth years. But, e-commerce disruption ended SSI's growth years, and because the company has failed to adapt its operations in a meaningful way to the e-commerce disruption, sales and profit trends have been hugely negative for several years. Now, SSI is left with largely depleted resources (only $25 million in cash), a still big debt load (over $675 million) and very little visibility to produce enough cash to service the debt load.To be sure, comps here are positive -- a rarity on this list -- as Stage Stories is trying to survive by converting its full-price department stores into more popular off-price discount stores. This transition has potential. But, margins are still dropping, EBITDA is still falling and cash flows are still negative. Plus, off-price stores don't always work out, either -- just ask Fred's.Thus, this move may be too little, too late. Ultimately, it does appear that despite this smart off-price pivot, the ultimate outcome here is for Stage Stores to end up in the retail graveyard. Big 5 Sporting Goods (BGFV)Source: Jonathan Weiss / Shutterstock.com The sporting goods sector has had its fair share of bankruptcies over the past several years, and the industry may get another bankruptcy soon with Big 5 Sporting Goods (NASDAQ:BGFV).In the big picture, the sporting goods sector got too big to be sustainable. That is, now that Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN) and Target (NYSE:TGT) all sell a ton of sporting goods equipment, the market doesn't need a dozen sporting goods department stores anymore. It only needs one or two -- meaning that this market is consolidating around a handful of larger players. Big Five simply isn't one of those players, and as such, it's tough to see there being enough room in the market for Big Five to stay around for much longer.The financials here aren't pretty, either. Big Five has a ton of debt -- about $350 million in debt and operating lease liabilities. Meanwhile, there's only $6.6 million in cash on the balance sheet. Cash flows haven't been consistently positive for about a decade, and the outlook remains dim for them to be consistently positive anytime soon. Comps are positive, but gross margins and profits are still dropping as discounting appears to be driving the positive comps. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off There's not much to like here. The sporting goods sector is consolidating, and that consolidation is squeezing out Big 5, who -- with only $6 million in cash left against nearly $350 million in debt -- seems to be on the verge of the bankruptcy. Pier 1 (PIR)Source: Jonathan Weiss / Shutterstock.com Next up, we have struggling furniture retailer Pier 1 (NYSE:PIR), who checks off all the boxes of a retail company on the verge of bankruptcy.Limited resources? Check. Pier 1 only has $30.5 million in cash on the balance sheet. Tons of debt? Check. Against that tiny $30.5 million cash balance, Pier 1 has $950 million in total debt on the balance sheet. Negative sales trends? Check. Comparable sales dropped 13.5% last quarter. Sales dropped 15.5%. Retreating margins? Check. Gross margins dropped over 700 basis points last quarter, and operating losses widened. Negative cash flows? Check. Cash flows have turned sharply negative this year, and there isn't much visibility for them to turn back into positive territory anytime soon, if ever.Zooming out, Pier 1 has struggled as e-furniture retailers like Wayfair (NYSE:W) have jumped onto the scene and stolen market share. The big problem? E-commerce penetration rates in furniture retail are around 13%, versus roughly 30% for apparel and consumer electronics. Thus, the e-commerce disruption problem for Pier 1 will only get bigger and bigger over time. As it does get bigger, things will only get worse. Sales will keep dropping, margins will keep retreating, losses will widen, and eventually, the company simply won't have enough financial firepower to service its near $1 billion in debt.PIR stock may not be around for much longer. Bed Bath & Beyond (BBBY)Source: Jonathan Weiss / Shutterstock.com The story at Bed Bath & Beyond (NASDAQ:BBBY) is very similar to the story at Pier 1.Big picture, both are struggling home goods and furniture retailers which are being squeezed out of the market. When it comes to Bed Bath & Beyond, there are two things at play here. One, the mainstream emergence of e-furniture retailer players like Wayfair has pulled customers away from BBBY stores. Two, the expansion of big box retailers like Amazon, Walmart and Target into the home goods and furniture game has eroded BBBY's differentiation in a very crowded retail marketplace.The result? Many consumers have left Bed Bath & Beyond stores, and unless the company runs huge discounts (which would kill margins and lead to huge losses), those churned customers don't have much reason to go back.That's why comps and sales trends have been, are and will remain negative. Same with margin and profit trends. It doesn't help that cash and cash flows are limited, and that the debt load is enormous.Overall, it seems like Bed Bath & Beyond is doomed for a similar fate as Pier 1.As of this writing, Luke Lango was long TGT and W. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post 6 Retail Stocks on the Verge of Bankruptcy appeared first on InvestorPlace.
As part of its turnaround efforts, J. C. Penney (JCP) is all set to launch an in-house outdoor category and an Outdoor Shop that will feature three new product lines.
Plano, Texas, Sept. 10, 2019 -- J. C. Penney Company, Inc. (NYSE: JCP) today announced that Colin Dougherty, a senior executive with more than 25 years of finance experience,.
J.C. Penney Co. Inc. said Tuesday that is launching St. John's Bay Outdoor, a private-label brand of men's outdoor items, starting on September 12 in about 600 stores and online. The collection will include shirts, jackets and pants, and will be priced from $11.99 to $44.99. Items will be sold at the Outdoor Shop, another new addition that will be available in select stores. The Outdoor Shop will carry additional brands, like American Threads, sold exclusively at J.C. Penney this fall, The American Outdoorsman, which has features like waterproof pockets and moisture-wicking fabrics, and Hi-Tec, which will include fleeces and outerwear. J.C. Penney is up nearly 18% on Tuesday, trading around $1. The stock has fallen 43.3% over the last 12 months while the S&P 500 index has gained 3.1% for the period.
JCPenney plans to launch an "Outdoor Shop" within the men's department of stores that is expected to feature three new clothing lines.
JCPenney [NYSE: JCP] is bringing the great outdoors inside with the launch of St. John’s Bay® Outdoor, a new category designed to inspire and serve customer experiences and build on the strength and relevance of the retailer’s popular men’s private brand. Launching in approximately 600 stores and jcp.com beginning Sept. 12, this versatile collection of rugged shirts, jackets and pants will carry him from outdoor adventures to a guy’s night out in style. Additionally, JCPenney is launching an Outdoor Shop in select stores in October, featuring St. John’s Bay Outdoor, along with American Threads®, The American Outdoorsman® and HI-TEC®, just in time for cooler weather and increased outdoor excursions.
JCP rallies on word of a new St. John's Bay Outdoor brand and a plan to add new 'stores within stores' to sell outdoor sportswear.
Struggling pharmacy retailer Rite Aid (NYSE:RAD) has shown surprising signs of life recently, as RAD stock has rallied an impressive 40% over the past seven trading days. That's a big rally in a short amount of time. Indeed, it's the biggest seven-day rally RAD stock has staged in the past five years.Source: Ken Wolter / Shutterstock.com Does this recent strength imply that the worst of the secular decline in Rite Aid is over? Is RAD stock finally ready to rebound?I don't think so. It's worth contextualizing this rally. Sure, the stock is coming off its best seven-day stretch in over five years. But, the Rite Aid stock price today is simply where it was a month ago.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn other words, this big rally happened on the heels of a big selloff, and in the big picture, it doesn't look all that significant. It also doesn't help that there isn't much fundamental or optical support for this rally. The valuation remains fairly unattractive without fundamental upside drivers. As such, I think the big seven-day rally in Rite Aid stock is more likely to fizzle out than to persist.To be sure, at some point, Rite Aid stock could become a buy with multi-bagger potential. But at the current moment, that bull thesis lacks clarity. So long as it continues to lack clarity, I think the safest place to hangout here is on the sidelines. Rite Aid Has Secular ChallengesWhen it comes to Rite Aid, I think what you have is the pharmacy version of GameStop (NYSE:GME) or J.C. Penney (NYSE:JCP). That is, just as GameStop and J.C. Penney failed to adapt to digital consumption trends and have subsequently lost relevance in the video game and mall retail worlds, Rite Aid has similarly failed to adapt to digital consumption trends and has subsequently lost relevance in the pharmacy world.The story is pretty simple. E-commerce happened. When e-commerce happened, everything changed. Consumers shifted from physical to digital shopping. Some retailers changed with the times -- in the pharmacy world, see Walgreens (NASDAQ:WBA) and CVS (NYSE:CVS) -- and have since thrived as omni-channel retailers. Both Walgreens and CVS have seen their pharmacy market shares grow from 2010 to 2018. * 7 Stocks to Buy In a Flat Market Other retailers didn't adapt. See Rite Aid, who didn't refresh stores to be tech-savvy or build out a robust e-commerce business. Not surprisingly, Rite Aid's pharmacy market share has dropped from 6.2% in 2010, to 2.6% in 2018, while it has gone from a top three pharmacy retailer in 2010, to being nudged out of the top five by the likes of Walmart (NYSE:WMT) and Kroger (NYSE:KR).The unfortunate reality here is that there isn't much visibility to Rite Aid gaining relevance anytime soon. The balance sheet is cash-strapped and debt-heavy, and cash flows aren't consistently profitable, so the company is operating with two hands tied behind its back for the foreseeable future -- meaning that store refreshes and e-commerce expansion aren't coming soon.In other words, Rite Aid has secular challenges that aren't going away any time soon. Until they do, it's tough to see Rite Aid stock rallying in a meaningful way from here, especially considering the stock trades at a not-that-cheap 7-times forward EBITDA multiple. Rite Aid Stock Could Turnaround … But Not YetAs I've argued before, Rite Aid stock could turnaround in the event that its distribution partnership with Amazon (NASDAQ:AMZN) introduces Rite Aid to a new and valuable shopper demographic.The thesis here is simple. Rite Aid shoppers skew old and poor. Amazon shoppers skew young and rich. Amazon's new partnership with Rite Aid will inevitably bring some Amazon shoppers through Rite Aid's doors. Most of those shoppers probably haven't been inside a Rite Aid store in ages, if ever.Most will probably look at the outdated stores, be uninterested, pick up their Amazon.com order, and promptly leave. Some may actually like what they see when go into Rite Aid, meaning some of these new, young and rich shoppers may actually start shopping at Rite Aid stores somewhat regularly.That will provide a meaningful lift for Rite Aid's sales, and this lift should last for several years.All in all, the Amazon partnership gives Rite Aid a unique opportunity to win over a demographic that has long forgotten about Rite Aid. If the company appropriately capitalizes on this opportunity, RAD stock could turn into a multi-bagger from here.But, we don't know if that will happen. Until the data suggests that this is indeed happening, the turnaround thesis in RAD stock will lack conviction and clarity. Bottom Line on RAD StockAt the current moment, there are two ways to look at the price action in RAD stock. One, Rite Aid stock is coming off its best seven-day stretch in over five years, and is ready to turnaround. Two, Rite Aid stock is exactly where it was a month ago, and is stuck in a secular downtrend.I think the latter perspective holds more credibility and has more support. As such, for the foreseeable future, I think it is best to avoid RAD stock.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post It's Still Too Risky to Bet on Rite Aid Stock appeared first on InvestorPlace.
[Editor's Note: This article is updated each week with the latest insider moves.]I have learned that a simple, yet effective way to find stocks to buy is to look for companies with insider buying. This is especially the case if the stock has recently moved downwards in price.Insiders are people who have access to confidential information about a company. When they buy or sell their company's stock, the need to make a public filing with the U.S. Securities and Exchange Commission. This is intended to prevent insiders from taking advantage of information that the public does not have access to. For example, if an insider has information that a news story which will drive the stock price higher is about to be released, they could buy it from shareholders that don't know the news.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBecause of this we can find out when insiders are buying or selling their stock.There are many reasons why they may sell. Maybe they need to raise money to buy a house or to pay for their kids' braces. * 7 Best Tech Stocks to Buy Right Now However, there is only one reason why an insider will buy the stock. They believe that it is currently undervalued. They buy it because they believe that it will eventually trade higher and they will profit.The following stocks have had significant insider buying following recent price declines. Post Holdings (POST)Post Holdings (NYSE:POST) is a consumer packaged goods holding company. POST reported earnings earlier this month, and shareholders did not like what they heard. In just a few days, POST stock lost over 10% of its value.As president of Michael Foods, an operating company of Post Holdings, Mark Westphal is an insider of the company. He must think that the selloff is an overreaction because he just invested almost $200,000 of his personal funds. He paid $98.13 per share for 2,000 shares.Wall Street also thinks that POST is a good value at current levels. Twelve firms follow the company on a research basis. Ten of them have "buy" ratings on it, while the other two have the stock rated as a "hold." The average target price is around $123, which is over 20% higher than where it is currently trading. J.C. Penney (JCP)J.C. Penney (NYSE:JCP) sells merchandise to its customers though its department store and website. Like many other traditional retailers, this company is facing tough times. Some analysts attribute this to the Amazon (NASDAQ:AMZN) effect, while others think that it is due to a series of strategic blunders.Wall Street doesn't see this company turning around any time soon. The average rating is "underweight," and the average target price is 86 cents. This is probably the lowest price target that I have ever seen put on a company. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off Many insiders must think the stock is a bargain at these levels because the have just made large purchases. CEO Jill Soltau just bought 500,000 shares at 56 cents per share. Chairman Ron Tysoe made an even larger investment of almost $600,000 when he paid 59 cents for 1 million shares. There has been significant buying by other insiders as well. Town Sports International HoldingsTown Sports International Holdings (NASDAQ:CLUB) offers group exercise and fitness programs. Shareholders of this company may be be losing weight if they work out there, but they are also losing money. The value of CLUB stock has fallen by almost 80% over the past year.Patrick Walsh is the CEO of CLUB. He must believe that the stock is a great value at these levels. On Aug.26, he invested $330,000 of his personal funds when he paid an average price of $1.52 for 216,266 shares. Just two days later, he bought another 68,550 shares at an average price of $1.87 per share. This puts his investment up to just over $450,000.Only one firm follows Town Sports on a research basis. It has a "buy" rating on it with a target price of $3. Supernus Pharmaceuticals (SUPN)Supernus Pharmaceuticals b(NASDAQ:SUPN) engages in the development and commercialization of products for the treatment of central nervous system diseases.When the company announced its second-quarter 2019 results, shareholders were disappointed and the stock dropped from around $33 to $26 a share.The CEO and president of the company, Jack Khattar, believes this selloff has created a great buying opportunity. He just paid $26.39 a share for 7,300 shares. * 7 Mega-Cap Tech Stocks on a Rebound Now The Street also believes the stock is a good value at these levels. Eight firms follow it and the average rating is a "buy." The average target price is $53, which is almost two times higher than where SUPN stock is is currently trading. TriState Capital Holdings (TSC)TriState Capital Holdings (NASDAQ:TSC) is a bank holding company that provides commercial banking, private banking and investment services to middle-market companies, institutions and high net worth individuals.TSC has lost about 20% of its value over the past three months due to fears over an inverted yield curve and a possible recession.James Getz is the chairman, CEO and president of TriState. He must believe that the stock will eventually rally because he just bought 25,000 shares for $19.41 per share. Nothing says confidence like an almost $500,000 investment.Wall Street agrees with Getz. Five firms follow it. The average rating is "overweight" while the average target price is $25.50, about 25% higher than current levels. East West Bancorp (EWBC)East West Bancorp (NASDAQ:EWBC) is a bank holding company that provides financial services. After East West reported its Q2 2019 earnings, the stock dropped by almost 30%.As a result of this selloff, there has been significant insider buying. These insiders must believe that the earnings release wasn't as bad as the sellers thought. * 7 Safe Dividend Stocks for Investors to Buy Right Now CFO Irene Oh just purchased 6,400 shares at $39.10, a $250,000 investment. Paul Krause is the executive vice president. He made a similar size investment when he paid $39.19 for 6,400 shares. And CEO Dominic Ng just invested $600,000 on Aug. 27 when he bought 15,800 shares at $38.01. On Aug. 28 and Aug. 29, Ng made investments bought another 10,040 shares. Community Health Systems (CYH)Community Health Systems (NYSE:CYH) engages in the management and operation of hospitals.CYH stock has lost over 50% of its value since this past March. This could be because shareholders are disappointed after the company reported a loss of $1.47 a share in its most recent quarter.Wayne Smith is the CEO and chairman of Community Health. Has must believe that the selloff is almost done because he just invested over $2 million into the stock at an average price of $1.99.In early August, Community Health's Executive Vice President and General Counsel Ben Fordham made a $57,000 investment when he paid $2.29 for 25,000 shares. Even more recently, on Aug. 27, Fordham purchased another 25,000 shares at $1.85 per share. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Real Estate Investments to Ride Out the Current Storm * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk * 7 Safe Dividend Stocks for Investors to Buy Right Now The post 7 Stocks the Insiders Are Buying on Sale appeared first on InvestorPlace.
Despite fears of a consumer slowdown, Americans kept shopping in August. The retail sales numbers for August grew by 0.4%, driven by an increase in auto spending.