There are signs of strength in the off-price segment in particular, whose brick-and-mortar “treasure hunt” bargain-hunting environment has been lauded for its seeming immunity to Amazon (AMZN).
The T.J. Maxx parent is not the only discounter doing well. Off-price peer Burlington Stores (BURL) is approaching an add-on buying opportunity, and Ross Stores (ROST) is still in buy territory after clearing an 84.67 entry point from a cup-with-handle base in early June.
TJX, which is in a four-weeks-tight pattern, was up 0.2% to 95.70 on the stock market today, slightly below a 96.92 entry point, an add-on buy point that follows a more-than-20% climb from its most recent breakout.
Shares have mostly kept abreast of their 50-day moving average this calendar year, accelerating their climb above the key level starting in May, when the stock got an additional boost of confidence from a solid earnings report.
TJX stock’s Relative Strength line is now at levels not seen since late 2016, and the stock recently hit a new all-time high of 96.82 in late June.
Stock Of The Day: How TJX Measures Up
Better-than-expected first-quarter earnings, revenue and same-store sales figures marked TJX’s most recently reported quarter, and management raised the low end of full-year profit guidance.
TJX, which has earned a 96 Composite Rating, is a member of IBD’s Retail-Apparel/Shoes/Accessories industry group, which ranks No. 8 out of the 197 groups that IBD tracks. In addition to Burlington and Ross, Lululemon (LULU), Urban Outfitters (URBN) and American Eagle Outfitters (AEO) are part of this particular retail group.
Retail sector stocks have turned in a surprisingly strong performance so far in 2018. Dollar General (DG), not a direct peer to TJX but another discounter company, is another recent IBD Stock Of The Day highlight.
RBC analyst Brian Tunick recently told IBD that the entire off-price industry, which includes TJX, Ross Stores, Burlington Stores and Nordstrom Rack, is “essentially already bigger than the department store channel that they’re supposedly offering a value from.”
And with plans for the off-price industry to grow by another 2,000 brick-and-mortar stores over the next decade or so, Tunick said “you’re talking about a $20-plus billion pull of revenue opportunity.”
YOU MIGHT BE INTERESTED IN: