Has Sandy Offered a Buying Opportunity for Macy’s Stock?

With shares of Macy’s (NYSE:M) trading at around $39.14 is M an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Macy’s recently released some good news as well as some bad news. The good news is that Macy’s enjoyed its best Thanksgiving weekend ever. It looks like the consumer might be alive and well after all. The bad news is that Hurricane Sandy hit sales hard. Same-store sales were projected to come in at 1.5%, but came in at -.07%. While this might be bad news in the short term, it does present a potential buying opportunity. A lot of money has been made off of storms throughout the years. The damage caused by a storm is often short term, which usually presents a buying opportunity after a company’s stock is knocked down. That doesn’t mean that will be the case here, but it’s possible.

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There is an even bigger storm on the horizon, which goes by the name of Fiscal Cliff. If politicians can’t agree to a deal, then retailers will get hurt badly. Even if a deal is reached, there is danger. It all depends on the details of the deal. That’s why so many people are on the sidelines right now.

Macy’s recently saw a 3.80% increase in revenue for Q3 YoY. This is better than the industry average of 2.3%. Annual earnings for 2013 are also projected to come in at 3.41, which would be a big jump compared to 2012. In addition to that, online sales were up 39.2% in November. Let’s take a look at more important numbers so we can form an educated opinion on where the stock might be headed.