Welcome to #FreeChartFriday, where I share assorted charts that caught my attention during the week. On the docket this week are charts that I personally handcrafted after studying many fun numbers inside of Excel docs. As I noted on Thursday, trends in data are super important to extract, as they could help buying an undervalued stock or avoiding hype in the marketplace for a dog of a company. Find the trends, understand the trends, and make bank from the trends!
Chart 1: Costco as a God Retailer
For as long as I have covered Costco (COST) (10 long years), investors have been asked to pay a rich multiple for the privilege of owning a somewhat consistent earnings story. Unfortunately, that consistency has begun to deteriorate, something I have frequently chronicled on Real Money. With the entire retail sector now price-matching one another and Costco in store-growth-ramp mode, I believe the shares should be avoided as estimates and multiples compress. Check out the ugly, long-term trends at Costco.
Chart 2: Specialty Apparel Retailers Decimated
The best retailers around these days? It's not Costco, it's H&M and Forever 21, which are systematically dismantling the former retail store empires of Aeropostale (ARO), American Eagle Outfitters (AEO) and Abercrombie & Fitch (ANF). Between today and 2016, American Eagle Outfitters and Abercrombie & Fitch alone have 800 store leases expiring, and a good majority of these locations will be shuttered due to intense competitive forces. Drastic action is required given the embedded sales declines at these companies.
Chart 3: A Big Box Store Upheaval Is Coming
Please return to TheStreet.com for my piece on large-box retailing. I assure you, it will not disappoint. In the meantime, I will offer this clue: Very challenging sales at Wal-Mart (WMT), Target (TGT) and Best Buy (BBY) despite significant price investments suggest a big change is required in the industry and fast.
Source for Charts: Belus Capital Advisors