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The retail sector is in focus this week. We are pitting our Bullish and Bearish picks against each other, since they are direct competitors and the success of one will most likely mean the failure of the other. While our Bullish pick is opening new stores and looks to keep their successful model going overseas, our Bearish pick is losing value due to their underlying real estate falling through the floor. This Week's picks will make for an interesting comparison throughout the year. |
Costco (COST) -
Costco runs an extremely efficient ship. The management believes that running a good
business is where their focus should be and the stock price will eventually reflect that.
So far they have been right and now they are taking their philosophy worldwide, with an international expansion. The recession brought a new customer base that they will keep, even if the economy experiences a full recovery. Either way this retailer looks poised to
continue success in the new year.
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Sears Holdings (SHLD) -
Investors in Sears should be feeling good about the way the year ended, with the increase in 4th quarter earnings and slight same stores sales rise. But the real problem is what their competitors are doing. Wal-Mart, Target and Costco are currently considered much stronger brand names with growing customer loyalty and increasing their market share both domestically and internationally.
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