Another day, another retail "rout," as investors jettison some sellers across the board whether small, medium or large following some less-than-stellar sales reports issued earlier Thursday. It seems like there is nowhere to hide today in what has been one of the more fascinating sectors over the past couple of years.
Specialty name Fossil (FOSL) , which I owned last year at a bargain basement price and sold after a much quicker than expected rise (actually made a Christmas gift purchase there this year) has been down as much as 14% Thursday. That's with no news, of course, just a sympathy play as the entire sector gets hammered.
Action in this name has been crazy. The stock rose from less than $7 in December 2017 to $31 the following June. Since then it's been pretty much all downhill, but the ride has been a choppy one. Over the past year's 250 trading days, FOSL has closed up or down at least 5% a remarkable 62 times! That include 15 days that it moved at least 10%. Last Valentine's Day it jumped 88%. I'd imagine that this could be the epitome of a trader's dream that is if you can get it right. That's certainly not my discipline. FOSL currently trades at about 16X next year's consensus estimates, but is way too volatile at this point for me.
Hibbett Sports (HIBB) , was down about 5% at one point but has recovered somewhat and is now down about 2.5%. HIBB is trading at just 9 X next year's consensus estimates, a low valuation that may provide some support that is if the company can deliver on earnings. I owned this one much of 2018, selling for a nice gain in August, but then uncharacteristically took a new position days after selling when the stock fell 30% after a worse than expected second quarter earnings report. It was downhill from there for the balance of 2018, and I ultimately jettisoned HIBB at year-end to harvest the tax loss. It's up 11% year to date in 2019, but I'm not inclined to buy here.
Meanwhile, Macy's (M) is getting crushed, down 19% as of 1 p.m. ET and it's not a sympathy move. The company reported disappointing holiday same store sales growth of just .7%, and reduced full-year earnings from $4.10-$4.30 to $3.95-$4.00. Macy's now yields nearly 5.9%, which is compelling, but this old style retailer simply is not for me either.
Retail has become a truly different animal -- the days of "buy and hold" appear to be long over. I am even a bit skittish on the bottom-fishing angle unlike in 2017 and 2018; it would have to be an extremely compelling situation with a huge margin of safety to get me interested.