Sometimes, one must roll with the punches when it comes to television. Case in point, I was invited back on CNBC last week and asked to take the positive side in a Bull/Bear debate on the Retail Industry. Watch my appearance here.
We thought readers might be interested in the notes provided to the CNBC producers in conjunction with the appearance.
With the understanding that generally we are modestly underweight retail versus the S&P 500 in our diversified Consumer Discretionary sector exposure that includes companies like Royal Caribbean, Walt Disney and General Motors, we think that there are attractive names in the industry group for those focused on buying undervalued stocks in a broadly diversified portfolio. While we respect the competitive challenges posed by Amazon, we believe that the improving health of the economy should put more dollars in consumers’ pocketbooks, and that selective retail stocks are solid long-term investments.
These can be broken down into a couple of categories:
1. Very-inexpensive (deep value), high-dividend payers with a flat EPS outlook that are priced for imperfection.
Apparel merchant American Eagle Outfitters, which boasts a strong balance sheet with no long-term debt, a growth vehicle in its Aerie intimates stores that will likely help keep firm-wide EPS relatively flat for…