Monday, 26 April 2010 12:52

What We’re Looking For To Go Splat! Part 2

In my previous post, I gave a quick snapshot of the retail sector macro environment.  In this post I will present a list of potential shorts for subscribers as well as the entire universe of companies used for those who don't subscribe.

Below is a list of 141 retail companies whose market cap is greater than$500 million and share price is over $10 that we used to create a universe of potential retail shorts.

[iframe http://spreadsheets.google.com/pub?key=t-O2vhJY5LECZgfPgzCuSMQ&single=true&gid=0&output=html&widget=true 600 600]

Then we:

  1. Eliminated 65 companies with Negative Net Debt and Positive Sales Growth (Quarterly) - 74 left.
  2. Applied various conditions for key parameters to shortlist companies (proprietary), created a rated list out of the aforementioned 74
  3. Selected companies primarily based on:
    1. Declining margins
    2. Declining sales
    3. High debt
  4. Reduced the list to 4 companies and scoured the footnotes, addenda and fine print to see what we could dig up. This short list is available to subscribers here: . I took the liberty of including short interest and days to cover to assist in short squeeze management for those that don't use options. We will choose one of these four to perform a full blown forensic analysis. Membership input, feedback and suggestions are quite welcome. Feel free to email me.
    1. Interested parties may click here to subscribe.

For those that don't subscribe, some of our rejects may be of interest...
[iframe http://spreadsheets.google.com/pub?key=tU199qjSINkb6wiCrUKWbqg&single=true&gid=0&output=html&widget=true 600 400]

Subscribers are urged to peruse our shortlist and delve into our stated reasons for shortlisting each - File Icon Retail Short Analysis.

Professional and Institutional Subscribers have access to the very wide swath of fundamental data on the entire universe of retail stocks considered, as well as 48 quarters of personal consumption data across many categories - File Icon Retail Sector Shortlisting_042110 - Pro Addendum.

Last modified on Monday, 17 May 2010 13:23

2 comments

  • Comment Link Reggie Middleton Tuesday, 27 April 2010 16:20 posted by Reggie Middleton

    I'll take a look at it.

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  • Comment Link shaunsnoll Tuesday, 27 April 2010 15:35 posted by shaunsnoll

    have you ever looked at RCL reggie? much much worse balance sheets and financing needs when you take into account ship building contracts. RCL and CCL are in a slow motion death battle, just look at RCL ROIC vs. WACC. ROIC had been < WACC for 10 years straight! and look at the altman Z score on RCL.... they are both adding capacity into this terrible environment and actually raising prices now!! given the fixed costs in their business model as well as their rapid expansion into europe, RCL could be in serious trouble at some point in the next 2 years. serious trouble. to make it better, the valuations are above 10 year average. While not a "retail" name per se, affected by similar trends and look interesting to me on the short side.

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