A customer walks past a "now hiring" poster on the door of a Dick's sporting goods store in in Aurora, Ohio.Amy Sancetta
American shoppers are alive and well, evident in consumer-spending and same-store-sales reports. That's spurred a rally in retail stocks. Here are six small-cap shares that recorded 52-week highs Tuesday and have delivered big gains so far in 2010.
6. Dick's Sporting Goods has climbed 8.2% this year and 13% in the past four weeks. It swung to a fiscal fourth-quarter profit of $67 million, or 56 cents a share, from a loss of $104 million, or 93 cents, a year earlier. Revenue grew 11%. The operating margin declined from 9.1% to 8.5%. Of analysts covering Dick's, 14, or 52%, advise purchasing its shares and 13 suggest holding them. The stock trades at a price-to-cash-flow ratio of 7.4, a 59% discount to its peer-group average. JMP Securities projects a share price of $32, implying 20% of upside.
5. Jo-Ann Stores sells fabric and craft supplies. Its stock has advanced 13% in 2010 and 10% in the past month. Fiscal fourth-quarter profit increased 82% to $37 million, or $1.36 a share, as revenue expanded 5.3%. Jo-Ann's operating margin widened from 5.7% to 10%. Of researchers following Jo-Ann, five advocate purchasing its shares and one recommends holding them. The stock sells for a price-to-projected-earnings ratio of 12, a 30% discount to the industry average. CL King & Associates expects the stock to gain 30% to $53.
4. Shoe Carnival has appreciated 16% this year and 26% during the past four weeks. It swung to a fiscal fourth-quarter profit of $2.6 million, or 20 cents a share, from a loss of $3.1 million, or 24 cents, a year earlier. Revenue grew 8.8% to $171 million. Of analysts covering Shoe Carnival, four rate its stock "buy" and three rate it "hold." The stock trades at a price-to-book ratio of 1.4, a 56% discount to its peer-group average. Sidoti & Co. expects the stock to advance 25% to $30. Sterne, Agee & Leach also expects Shoe Carnival to outperform the market in the weeks ahead.
3. Gymboree sells children's clothing. Its stock has increased 23% in 2010 and 26% in the past month. Fiscal fourth-quarter profit increased 13% to $33 million, or $1.11 a share, as revenue inched up 3.8% to $300 million. The operating margin extended from 17% to 18%. Of firms evaluating Gymboree, nine counsel purchasing shares and four advise holding them. The stock sells for a price-to-projected-earnings ratio of 12, a 29% discount to the industry average. Sterne, Agee & Leach values the shares at $64, implying 19% of upside.
2. Big Lots is a closeout retailer, offering furniture, toys and food products. Its stock has jumped 29% this year and 19% in the past four weeks. Fiscal fourth-quarter profit increased 34% to $105 million, or $1.28 a share, as revenue gained 7%. The operating margin widened from 9.7% to 12%. Of researchers following Big Lots, 11, or 73%, rate its stock "buy" and four rate it "hold." It trades at a price-to-projected earnings ratio of 12, a 36% discount to its peer-group average. MKM Partners projects a price of $46, leaving a potential 23% gain.
1. Syms Corp. sells off-price tailored clothing. Its stock has rallied 39% in 2010 and 4.7% during the past four weeks. It swung to a fiscal third-quarter profit of $26 million, or $1.76 a share, from a loss of $890,000, or 6 cents, a year earlier. Revenue more than doubled to $135 million. The operating margin climbed into shallow positive territory. The stock sells for a price-to-book ratio of 0.7, a 78% discount to the industry average. It's also cheap based on sales and cash flow. Just one sell-side firm, EVA Dimensions, follows Syms Corp., rating its stock "sell."