Target Stores ( TGT )

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Target Stores ( TGT )

Postby George$ » 19 Jun 2011 08:29

Is Target a good value buy today at $46.53 and a PE ratio of 11.4?

Over the years when in the US I was always impressed with their stores - good value and good products. They have now come to Canada via their purchase of Zellers.

And they seem to be an exceptional role model in their giving back 5% of income to communities - from their CEO -
Target started as a small retailer with a big reputation for social responsibility and community involvement. As our business continues to grow, so do our community commitments. Since 1946, our company has given 5% of its income—which today equals more than $3 million per week—to our communities. By the end of 2010, that totaled more than $2 billion in giving.

In recent months we’ve announced the largest single charitable initiative in Target’s history—$500 million to education, with a focus on helping kids read proficiently by the end of third grade. We also unveiled our first-ever public sustainability commitments and continued to focus on well-being for our team members and communities and on collaborating broadly inside and outside our organization to keep our stores and neighborhoods safe and strong.
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Re: Target Stores ( TGT )

Postby kcowan » 19 Jun 2011 11:35

DW and friends will certainly check out their stores. They were a favourite in the US. That will be a high bar to meet in Canada.

(2.6% yield and retail? I think I will wait and see!)
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Re: Target Stores ( TGT )

Postby Lazy Ninja » 19 Jun 2011 16:44

Similar to Walmart in that it hasn't offered a great return over the past 10 years. They were both quite dear leading up to the tech bubble. Target less so, hitting a P/E of about 30 vs. Walmart's P/E of 45 or so. As such, Target's done a little better over the past decade. To me, they both appear to offer decent entry points, based on both the multiple and the yield. Since 2001, Target's earnings have doubled, book value is up 2.5X, the dividend's nearly quintupled, and there are 20% fewer shares outstanding. Much, much cheaper now. The question is, what, if anything, will be the catalyst for multiple expansion? Like many large U.S. corporations, I don't know if they'll be able to grow earnings quickly enough to be able to command the hefty multiples they've enjoyed in the past.
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Re: Target Stores ( TGT )

Postby BRIAN5000 » 19 Jun 2011 17:03

Is Target a good value buy today at $46.53 and a PE ratio of 11.4?


I may hae you confused with someone else. I thought you were an indexer with lots of RRB's?
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Re: Target Stores ( TGT )

Postby George$ » 19 Jun 2011 19:04

BRIAN5000 wrote:
Is Target a good value buy today at $46.53 and a PE ratio of 11.4?


I may hae you confused with someone else. I thought you were an indexer with lots of RRB's?

That may be the other George - from Ottawa with a law degree. I'm the Toronto one with a physics degree. :roll: .

I'm into a bit of everything. Index as my core, small amount of RRBs from when they were yielding 3%, a pile of MSFT from 20 years ago, individual holdings of 'value' type equity shares and some preferred exposouere via James Hymas' MAPF fund.
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Re: Target Stores ( TGT )

Postby George$ » 20 Jun 2011 10:31

So I bought my 1000 shares of TGT at $46.51 this morning.

I see it is already up to $46.75 (an hour later).
Should I sell now? :roll: What does day trader Norbert advise? :?
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Re: Target Stores ( TGT )

Postby adrian2 » 20 Jun 2011 10:42

George$ wrote:So I bought my 1000 shares of TGT at $46.51 this morning.

I see it is already up to $46.75 (an hour later).
Should I sell now? :roll: What does day trader Norbert advise? :?

Day trader Adrian advises putting a sale order good for today @46.99
If executed, you've banked $480 gross or likely $460 net for one day. That should be in the same ballpark as your day job. :)
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Re: Target Stores ( TGT )

Postby George$ » 20 Jun 2011 11:06

adrian2 wrote:Day trader Adrian advises putting a sale order good for today @46.99
If executed, you've banked $480 gross or likely $460 net for one day. That should be in the same ballpark as your day job. :)

Alas my fear of 'regret' should the stock go to $56.51 in the next year outweights my 'short term greed' (or need?) to take $500 off the table and fold my TGT hand. :roll:

Seriously, I have not done as much due diligence as I wish I had time for on TGT - but my instict is that it is a well run company that treats its employees and community well (they are not unionized and staff in NY store just turned down a certification vote). Thus my confidence in the longer term.
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Re: Target Stores ( TGT )

Postby kcowan » 20 Jun 2011 11:38

I don't know George. They are expanding to Canada. That should put some pressure on their profit margins!
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Re: Target Stores ( TGT )

Postby adrian2 » 20 Jun 2011 12:03

George$ wrote:
adrian2 wrote:Day trader Adrian advises putting a sale order good for today @46.99
If executed, you've banked $480 gross or likely $460 net for one day. That should be in the same ballpark as your day job. :)

Alas my fear of 'regret' should the stock go to $56.51 in the next year outweights my 'short term greed' (or need?) to take $500 off the table and fold my TGT hand. :roll:

My view on these types of trades is to compare your current situation with the one last week. If you haven't sold any existing holdings to buy TGT, just used some available cash, if you sell it today you're in the exact same position as Friday, plus more than $500 in the black. Tomorrow, the day after, next week or next month you can rinse and repeat (or just sit tight and enjoy making much more than the interest on cash). As for potential regrets of not making $10k by next year, just forget you've owned it for a few hours; it never happened. :)
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Re: Target Stores ( TGT )

Postby adrian2 » 25 Jun 2011 09:33

adrian2 wrote:
George$ wrote:
adrian2 wrote:Day trader Adrian advises putting a sale order good for today @46.99
If executed, you've banked $480 gross or likely $460 net for one day. That should be in the same ballpark as your day job. :)

Alas my fear of 'regret' should the stock go to $56.51 in the next year outweights my 'short term greed' (or need?) to take $500 off the table and fold my TGT hand. :roll:

My view on these types of trades is to compare your current situation with the one last week. If you haven't sold any existing holdings to buy TGT, just used some available cash, if you sell it today you're in the exact same position as Friday, plus more than $500 in the black. Tomorrow, the day after, next week or next month you can rinse and repeat (or just sit tight and enjoy making much more than the interest on cash). As for potential regrets of not making $10k by next year, just forget you've owned it for a few hours; it never happened. :)

As TGT has closed on Friday at $46.33, the current score is Adrian 1 - Long term Strategy 0 (but of course, YMMV)

Rinse and repeat! :D
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Re: Target Stores ( TGT )

Postby Rickson9 » 25 Jun 2011 09:35

Too expensive, too big and not enough insiders (for me).

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Re: Target Stores ( TGT )

Postby adrian2 » 25 Jun 2011 09:57

Rickson9 wrote:Too expensive, too big and not enough insiders (for me).

I would not necessarily pick it myself, it's just an example of how "noise trading" might work.
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Re: Target Stores ( TGT )

Postby George$ » 26 Jun 2011 08:44

adrian2 wrote: ..... As TGT has closed on Friday at $46.33, the current score is Adrian 1 - Long term Strategy 0 (but of course, YMMV)

Rinse and repeat! :D

:) Alas, the 'slings and arrows' from too much tranparency on my part.

But .... Adrian, what about the current score at Norbert's scoreboard? :)
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Re: Target Stores ( TGT )

Postby adrian2 » 26 Jun 2011 08:51

George$ wrote:But .... Adrian, what about the current score at Norbert's scoreboard? :)

It takes talent to hold on to the last place! :)

Congrats on the silver medal so far!
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Re: Target Stores ( TGT )

Postby Taggart » 26 Jun 2011 12:56

I already own a few retailers, so not sure if I want to buy more, but looked at the dividend growth rate at Reuters and it showed 1 year = 37.31%, 3 year = 19.43%, and 5 year = 19.34%, on a 2.5% dividend yield and I thought like Wow. Tempting.
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Re: Target Stores ( TGT )

Postby ockham » 26 Jun 2011 13:35

George$ wrote:So I bought my 1000 shares of TGT at $46.51 this morning.

Seems like a big first bite from an apple you're not sure you want to be eating! . I dampen the effects of potential decision regret by buying in in several tranches. What's your approach?
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Re: Target Stores ( TGT )

Postby George$ » 26 Jun 2011 14:37

ockham wrote: ... Seems like a big first bite from an apple you're not sure you want to be eating! . I dampen the effects of potential decision regret by buying in in several tranches. What's your approach?
Buying in bits and pieces takes more time and costs more in fees. I have never had decision regret anxiety that I can remember. The purchase may also reflects my age (71 in August), I'm still employed, and our net worth in liquid assets. This amount is in line with our other family holdings in other major yielders like Johnson & Johnson, Kimberly Clark, Mcdonalds, Procter & Gamble, Coca Cola, Exxon, Wal Mart, etc.
It's also true that I could have done more due diligence on TGT - thus I may not do as well as I might wish.
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Re: Target Stores ( TGT )

Postby Taggart » 26 Jun 2011 15:07

George$ wrote:
It's also true that I could have done more due diligence on TGT - thus I may not do as well as I might wish.


Could you please expand on that George? Now I'm wondering what I'm missing. :roll:
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Re: Target Stores ( TGT )

Postby deaddog » 26 Jun 2011 16:31

George$ wrote:Alas my fear of 'regret' should the stock go to $56.51 in the next year outweights my 'short term greed' (or need?) to take $500 off the table and fold my TGT hand. :roll:

What about the regret if it goes down?

Scan for Fridays new highs, why don’t you regret not owning any of them?

Seems like a purchase based strictly on gut feeling. No DD, no real plan, no real idea what you want the stock to do.

As you already own a similar amount of WMT, are you not doubling your risk in that sector?
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Re: Target Stores ( TGT )

Postby George$ » 26 Jun 2011 16:55

Taggart wrote:
George$ wrote:
It's also true that I could have done more due diligence on TGT - thus I may not do as well as I might wish.

Could you please expand on that George? Now I'm wondering what I'm missing. :roll:

Expand? I guess I always think that one can do more than one does. Long time ago I realized that I would never reach the bar set by Graham (or Buffett) - and thus I'm expressing a general sense that while I do some background checking, it is not too deep, and in part there is a qualitative gut component - that does not constitute "due diligence".


deaddog wrote:
George$ wrote:Alas my fear of 'regret' should the stock go to $56.51 in the next year outweights my 'short term greed' (or need?) to take $500 off the table and fold my TGT hand. :roll:

What about the regret if it goes down?

Scan for Fridays new highs, why don’t you regret not owning any of them?

Seems like a purchase based strictly on gut feeling. No DD, no real plan, no real idea what you want the stock to do.

As you already own a similar amount of WMT, are you not doubling your risk in that sector?


Without going into a whole lot of detail, I did do some background checking and looked at the numbers in their annual report. But in general my conclusion was that "it seemed to be a well run company" - and bought on the basis of that and the reasonable price (reasonable P/E).

What do I want the stock to do? "Not lose money" over the next decade would be the short answer.
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Re: Target Stores ( TGT )

Postby Taggart » 26 Jun 2011 17:03

George$ wrote:
Taggart wrote:
George$ wrote:
It's also true that I could have done more due diligence on TGT - thus I may not do as well as I might wish.

Could you please expand on that George? Now I'm wondering what I'm missing. :roll:

Expand? I guess I always think that one can do more than one does. Long time ago I realized that I would never reach the bar set by Graham (or Buffett) - and thus I'm expressing a general sense that while I do some background checking, it is not too deep, and in part there is a qualitative gut component - that does not constitute "due diligence".


deaddog wrote:
George$ wrote:Alas my fear of 'regret' should the stock go to $56.51 in the next year outweights my 'short term greed' (or need?) to take $500 off the table and fold my TGT hand. :roll:

What about the regret if it goes down?

Scan for Fridays new highs, why don’t you regret not owning any of them?

Seems like a purchase based strictly on gut feeling. No DD, no real plan, no real idea what you want the stock to do.

As you already own a similar amount of WMT, are you not doubling your risk in that sector?


Without going into a whole lot of detail, I did do some background checking and looked at the numbers in their annual report. But in general my conclusion was that "it seemed to be a well run company" - and bought on the basis of that and the reasonable price (reasonable P/E).

What do I want the stock to do? "Not lose money" over the next decade would be the short answer.


Thanks George. I'm much the same as an investor. I don't go into depth, but just look for a few of the important items. If analysts can miss what happened to Nortel and Enron before their collapse, I don't think I can do much better.
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Re: Target Stores ( TGT )

Postby adrian2 » 26 Jun 2011 17:26

deaddog wrote:Scan for Fridays new highs, why don’t you regret not owning any of them?

You're a momentum trader a la O'Neill, I'm the opposite. I never look at the 52-week highs, only at the lows to pick through the trash.

Nasdaq 5000+ is still on the upside from the current prices, and it was all the vogue 11 years ago. It's quite conceivable that it will be a decade and a half of lost opportunities. As for Nortel $120 (that's my bragging rights, of course)...

Going back to your question, I feel no regret in not owning Apple or Lululemon. They can make new highs every week, or they can crash into the ground. I felt the same way about RIM (well, not quite, as I was too early in trying to take negative exposure to it).
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Re: Target Stores ( TGT )

Postby Taggart » 26 Jun 2011 18:50

adrian2 wrote:
deaddog wrote:Scan for Fridays new highs, why don’t you regret not owning any of them?

You're a momentum trader a la O'Neill, I'm the opposite. I never look at the 52-week highs, only at the lows to pick through the trash.

Nasdaq 5000+ is still on the upside from the current prices, and it was all the vogue 11 years ago. It's quite conceivable that it will be a decade and a half of lost opportunities. As for Nortel $120 (that's my bragging rights, of course)...

Going back to your question, I feel no regret in not owning Apple or Lululemon. They can make new highs every week, or they can crash into the ground. I felt the same way about RIM (well, not quite, as I was too early in trying to take negative exposure to it).


I'll let you in on a little secret of false judgement on my part. In 2001 as the tech crash was taking hold, I had Nortel, JDS Uniphase and Research in Motion in my portfolio. I kept Nortel and JDS Uniphase but ejected Research in Motion from the portfolio when it was a much smaller cap stock than what it is today. All had been bought a few months before near their highs. Watched the former two go all the way down. I bought Nokia a few years later when it looked cheap, but that didn't work out either, and eventually sold at a bit of a loss. Aside from that, as far as tech stocks, I've mainly kept away from this sector since, and to be honest don't miss it, even if it decided to go into another bubble market. I've read of many pros including Buffett saying they don't understand technology stocks and with what I've seen in the last decade I can understand why.
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Re: Target Stores ( TGT )

Postby Rickson9 » 26 Jun 2011 23:34

I don't understand tech stocks either so I've never invested in them. Too difficult for me to figure out and too fast moving an industry.

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