• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Real Estate

The Day Ahead: Summer Fun Profits

I think there are all sorts of red flags in the market.
By BRIAN SOZZI May 30, 2013 | 08:00 AM EDT
Stocks quotes in this article: KORS, JWN, SHW, VAL, WHR, LL, OC, MHK, JPM, COH, XHB, ITB

I've been feeling adventurous of late. Maybe it's because of the realization that I have no life. So on Wednesday I packed a bag and ventured into the city with the goal of seeking creative inspiration.

From 9 a.m. to noon, I hopped from Starbucks location to Starbucks location, scrubbing the free Wifi, and observing how people interacted at remodeled locations (memo: remodeled Starbucks now feature communal tables designed to keep people in the store spending, and networking).

After grabbing a bite to eat at an organic hummus hotspot, I hammered out 200 shirtless pushups at Central Park. I then rested to see what fellow athletes were wearing this summer as that is a great way to find stock picks (Nike clearly is the brand of choice for workout enthusiasts, sorry Lululemon). I actually had a quick chat with TheStreet's Stephanie Link while in the park chilling, which was a nice reminder to check the Bloomberg news app to stay current (she is always on top of all market news!).

The fruits of my organic research efforts are still be internally compiled. I don't want to rush perfection for the purposes of filling a page. I do have a couple topics, however, that could serve as jump off points for your daily investing homework.

Michael Kors (KORS) is a stock that I have been bullish on throughout 2013. Boo on Coach (COH), yay on Kors, as the latter's product is simply resonating season upon season with a more discerning customer base. The financials of the company back the claims. Although Kors has entered a period where growth has to moderate due to the law of large prior year numbers, and guidance has proved conservative, there was just something that irked me regarding the meager gross margin expansion in the quarter.

So I visited Lord  & Taylor, on the prowl for that up and coming brand that geeky I-bank analysts don't know is capturing sales otherwise reserved for Kors. The brand I found: Vince Camuto, which has a product assortment that boasts a bit more international visual flare than Kors and has priced its comparable looking products well below Kors. Quality is quite similar. From what I could tell, Vince Camuto has gained premium placement in watch display cases and is appearing in areas such as tops and accessories, right alongside Kors. That is potentially bad news for Kors. Oddly, this story resembles how Kors snuck up on Coach years ago, eventually thieving its sales and shareholder base.

Cashless checkout for consumers at retail stores is going to be a huge productivity driver and earnings tailwind once a company is beyond the initial investment related phase. Shoe department associates, for example, are carrying handheld devices that allow for the checking of backroom inventory as soon as the customer demands a size and color.

While they wait for an associate in the back to satisfy the request, the sales associate remains in constant contact with the customer, important in securing the sale. A logical way to play this is via Nordstrom (JWN); it will be completely cash register-less in its stores in under two years. Logically, there is a techie stock to also play, but I need to research further for the best opportunity.

Sloppy, Sloppy, Stock Market

The market action stunk on Wednesday, plain and simple. No bulls wielding their well-worn investment thesis will derail me from that opinion. I actually think there are all sorts of red flags in the market that began to take hold earlier this month. Some items to watch at this juncture include:

  • Fear of an indirect interest rate increase (via a pullback in QE) is knocking the stuffing out of SPDR S&P Homebuilders (XHB) and iShares Dow Jones US Home Construction (ITB), yet a JP Morgan (JPM) and a few other financials are holding strong. The message: homebuilder stocks are the stocks to watch as a tell on an imminent policy shift (hey, the market usually knows before we do) as their new orders could be nailed later in 2013. Banks on the other hand stand to benefit from charging more for a loan, though eventually higher rates will lead to slowing mortgage originations.
  • Derivative housing names appear to be where to hide in the sector on pullbacks. The stocks of interest include (they have been the relative outperformers to peers amidst the mini retrenchment): PPG Industries (PPG), Sherwin-Williams Company (SHW), Valspar Corp.(VAL), Whirlpool (WHR), Lumber Liquidators (LL), Owens Corning (OC), and  Mohawk Industries (MHK)  MHK has been a favorite of mine since late 2012.

Seeing defensive stocks with yields being convincingly sold during a 100-point Dow drubbing is worrying.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Sozzi had no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity | Real Estate | Consumer Discretionary | Stocks

More from Real Estate

This Opendoor Trade Is in Move-In Condition

Timothy Collins
Apr 1, 2021 2:12 PM EDT

With this call spread opportunity, traders can maximize the push seen in the technicals.

Zillow Enters Greater Fool Territory

Ed Ponsi
Feb 11, 2021 10:45 AM EST

I can name this tune in three notes, and if you were a homeowner or real estate investor 15 years ago, you probably can as well.

Migration Trends the Pandemic Triggered Won't End Soon

Bret Jensen
Feb 3, 2021 8:42 AM EST

The exodus of residents from big cities and the reduced demand for office space are unlikely to reverse for some time.

Debt-Laden Chinese Electric Car Company Shares Soar

Alex Frew McMillan
Jan 25, 2021 7:00 AM EST

Property developer China Evergrande has seen shares in its electric car unit skyrocket before it enters commercial production.

Jim Cramer: You Just Won Powerball, Now What?

Jim Cramer
Jan 21, 2021 2:24 PM EST

Remember, you only need to get rich once.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:05 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How recency bias and the Pareto Principle impact y...
  • 02:42 PM EDT PAUL PRICE

    Wednesday on Real Money Pro

    Make this stock a 'part' of your portfolio.
  • 04:44 PM EDT PAUL PRICE

    Pretty Incredible + Hard to Believe

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login