3 Stocks With Great Prospects in the Retail Bargain Bin
As stocks of traditional retailers continue to founder, investors are underappreciating these versatile brands.
As Morningstar contributor Bryan Borzykowski pointed out in a recent article, many department store stocks are trading at fire-sale prices. With that as a backdrop, he explored this question: Is the industry currently home to some intriguing value plays, or will many brick-and-mortar retailers will succumb to the powerful threat of e-commerce players such as Amazon?
In the wake of steep sales declines, employee layoffs, and store closures, it's not surprising that many department store stocks are trading at depressed prices. Compared with historical levels of around 20 times earnings, they're currently trading at close to 10 times, Borzykowski pointed out. With and many other sectors close to historical highs--and the median stock in our coverage universe around 3% overvalued as measured by price/fair value--these stocks are some of the cheapest around.
Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.