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TJX, DLTR, TGT, DG, PSMT, EDR, Retail - Discount and Variety Stocks Overvalued

^{Published on 2011-09-16 07:00:33 - WOPRAI}
 

September 16, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Retail - Discount and Variety sector and these stocks are the most undervalued as of today. TJX COMPANIES INC (NYSE:TJX), DOLLAR TREE INC (NASDAQ:DLTR), TARGET CORP (NYSE:TGT), DOLLAR GENERAL CORP (NYSE:DG), PRICESMART INC (NASDAQ:PSMT), EDUCATION REALTY TRUST INC (NYSE:EDR) are all expected to go Down as they are Overvalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     TJX        TJX COMPANIES INC                   $55.58         $54.96         1.10% Overvalued            Retail - Discount and Variety
     DLTR       DOLLAR TREE INC                     $75.27         $66.93         12.50% Overvalued           Retail - Discount and Variety
     TGT        TARGET CORP                         $51.70         $49.28         4.90% Overvalued            Retail - Discount and Variety
     DG         DOLLAR GENERAL CORP                 $37.39         $36.22         3.20% Overvalued            Retail - Discount and Variety
     PSMT       PRICESMART INC                      $72.74         $50.44         44.20% Overvalued           Retail - Discount and Variety
     EDR        EDUCATION REALTY TRUST INC          $9.29          $7.47          24.40% Overvalued           REIT - Equity Trust Residential

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

TJX COMPANIES INC (NYSE:TJX) - The TJX Companies, Inc. operates as an off-price retailer of apparel and home fashions in the United States and internationally. Its stores offer apparel, including footwear and accessories; home fashions, including home basics, accent furniture, lamps, rugs, wall decor, decorative accessories, and giftware; jewelry and accessories; mens and juniors offerings; childrens furniture; seasonal merchandise; and other merchandise. The company operates its stores under the T.J. Maxx, Marshalls, HomeGoods, A.J. Wright, Winners, HomeSense, and T.K. MAXX trademarks. As of February 24, 2010, it operated 890 T.J. Maxx, 813 Marshalls, 323 HomeGoods, and 150 A.J. Wright stores in the U.S.; 208 Winners, 79 HomeSense, and 3 STYLESENSE stores in Canada; and 263 T.K. Maxx and 14 HomeSense stores in Europe. The company was founded in 1956 and is based in Framingham, Massachusetts.

DOLLAR TREE INC (NASDAQ:DLTR) - Dollar Tree, Inc. operates discount variety stores in the United States. Its stores offer merchandise at the fixed price of $1.00. The company operates stores under the names of Dollar Tree, Deal$, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, basic health, and beauty care; household consumables, such as paper, plastics, and household chemicals, as well as frozen and refrigerated food; variety merchandise, which includes toys, durable house wares, gifts, fashion health and beauty care, party goods, greeting cards, apparel, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise, as well as summer toys, and lawn and garden merchandise. As of January 30, 2010, the company operated 3,806 discount variety retail stores in 48 states and the District of Columbia. Dollar Tree, Inc. was founded in 1986 and is headquartered in Chesapeake, Virginia.

TARGET CORP (NYSE:TGT) - Target Corporation operates general merchandise and food discount stores in the United States. The company offers household essentials; hardlines, including electronics, music, computer software, and toys; apparel and accessories, jewelry, and shoes; home furnishings and decor consisting of furniture, lighting, and kitchenware, as well as seasonal merchandise; and food and pet supplies primarily under Target and SuperTarget trademarks. It also sells its merchandise under private-label brands, including Archer Farms, Archer Farms Simply Balanced, Boots & Barkley, Choxie, Circo, Durabuilt, Embark, Gilligan & O'Malley, itso, Kaori, Market Pantry, Merona, Play Wonder, Room Essentials, Smith & Hawken, Sutton and Dodge, Target Home, Vroom, up & up, Wine Cube, and Xhilaration. The company also offers merchandise through programs, such as ClearRx, GO International, Great Save, and Home Design Event. In addition, it markets its merchandise under licensed and designer brands comprising C9 by Champion, Chefmate, Cherokee, Converse One Star, Eddie Bauer, Fieldcrest, Genuine Kids by Osh Kosh, Kitchen Essentials by Calphalon, Liz Lange for Target, Michael Graves Design, Mossimo, Nick & Nora, Sean Conway, Simply Shabby Chic, Sonia Kashuk, and Thomas O'Brien. Target Corporation also operates in-store amenities, such as Target Cafe, Target Clinic, Target Pharmacy, and Target Photo, as well as leased or licensed departments, including Optical, Pizza Hut, Portrait Studio, and Starbucks. The company markets its products through its network of distribution centers and third parties, as well as through its online shopping site, Target.com. As of June 2, 2010, it operated 1,740 stores in 49 states and the District of Columbia. Target Corporation also provides credit to qualified guests through its branded proprietary credit cards, including the Target Visa and the Target Card. The company was founded in 1902 and is headquartered in Minneapolis, Minnesota.

DOLLAR GENERAL CORP (NYSE:DG) - Dollar General Corporation operates as a discount retailer of general merchandise in the southern, southwestern, midwestern, and eastern United States. The company offers consumables, including paper towels, bath tissue, paper dinnerware, trash and storage bags, laundry, and other home cleaning supplies; packaged food and perishables; beverages and snacks, such as candies, cookies, crackers, salty snacks, and carbonated beverages; over-the-counter medicines and personal care products; and pet supplies and pet food products. It also provides seasonal products consisting of decorations, toys, batteries, small electronics, greeting cards, stationery, prepaid cell phones and accessories, gardening supplies, hardware, and automotive and home office supplies; home products comprising kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies, and bed and bath soft goods; and apparel products, such as casual everyday apparel for infants, toddlers, girls, boys, women and men, as well as offers socks, underwear, disposable diapers, shoes, and accessories. In addition, the company holds a license to Bobbie Brooks clothing, as well as the Fisher Price brand for various items of children's clothing. As of February 25, 2011, it operated 9,414 stores located in 35 states. The company was formerly known as J.L. Turner & Son, Inc. and changed its name to Dollar General Corporation in 1968. Dollar General Corporation was founded in 1939 and is based in Goodlettsville, Tennessee.

PRICESMART INC (NASDAQ:PSMT) - PriceSmart, Inc. owns and operates warehouse clubs in the United States, Latin America, and the Caribbean. Its warehouse clubs sell consumer goods and perishable foods at low prices to individuals and businesses, as well as offers ancillary services, which include food courts, tire centers, and photo centers. As of August 31, 2010, the company operated 27 warehouse clubs in 11 countries and 1 U.S. territory, including 5 in Costa Rica; 4 each in Panama and Trinidad; 3 in Guatemala; 2 each in Dominican Republic, El Salvador, and Honduras; and 1 each in Aruba, Barbados, Jamaica, Nicaragua, and the United States Virgin Islands. PriceSmart, Inc. was founded in 1994 and is headquartered in San Diego, California.

EDUCATION REALTY TRUST INC (NYSE:EDR) - Education Realty Trust, Inc., a real estate investment trust (REIT), develops, acquires, owns, and manages student housing communities located near university campuses in the United States. It also provides third-party management services, including residence life and student development, marketing, leasing administration, strategic relationships, information systems, and accounting services for student housing communities owned by educational institutions and charitable foundations. In addition, the company offers third-party development consulting services, such as market analysis and evaluation of housing needs and options; co-operation with university in architectural design; negotiation of ground lease, development agreement, construction contract, architectural contract, and bond documents; oversight of architectural design process; co-ordination of governmental and university plan approvals; oversight of construction process; design, purchase, and installation of furniture; pre-opening marketing to students; and obtaining final approvals of construction. It provides its third-party development consulting services primarily to universities seeking to modernize their on-campus student housing communities, as well as to other third-party investors. As of December 31, 2009, the company owned 40 student housing communities located in 19 states containing 25,454 beds in 7,813 apartment units located near 35 universities. It also provided third-party management services for 20 student housing communities located in 9 states containing 10,186 beds in 3,272 apartment units at 16 universities. The company qualifies as a REIT for federal income tax purposes. As a REIT, it would not be subject to federal corporate income tax if it distributes at least 90% of its REIT taxable income to its stockholders. The company was founded in 1964 and is based in Memphis, Tennessee.

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