Are Nordstrom and The Gap for Real?

The Trading Edge with Derek HoffmanThis week, Harry Davidowitz, chairman of retail consulting firm Davidowitz & Associates recently said on Yahoo Finance’s Tech Ticker, “If the consumer isn’t petrified, he or she is a damn fool.”

Although the retail maestro is screaming caution on major media stages like Tech Ticker and CNBC, two companies bucking the trend are Nordstrom (JWN) and Gap (GPS). As you will see on their stock charts, both of these stocks’ prices are very extended off their 50-day and 200-day moving averages. Take a look at the fundamentals and technicals of two steaming stocks, JWN and GPS:

Nordstrom (JWN): $42.39 per share

JWN Fundamentals
Market Cap: $9.17 Billion
Forward P/E: 14.44
Trailing P/E: 21.01
Revenue: $39.79 per share
Cash: $3.64 per share
Dividend: 1.5%

Rihanna and TOMS shoes are Heating up the Shelves

Seattle-based Nordstrom Inc (JWN) reported a March same-store sales increase of 16.8% yesterday, compared to analyst estimates of 10.6%. Total sales rose 21% to $815 million from $674 million. It appears shoppers just cannot get enough of Rihanna’s latest wardrobe or the latest shoe craze over TOMS Shoes.

Gap (GPS): $24.78 per share

GPS Fundamentals
Market Cap: $16.51 Billion
Forward P/E: 13.16
Trailing P/E: 15.69
Revenue: $20.45 per share
Cash: $3.85 per share
Dividend: 1.7%

‘They Call Me Mellow Yellow’

San Francisco-based Gap Inc (GPS) reported a same-stores sales increase of 11% yesterday. Analysts were expecting just climb of 3.7%, shattering expectations. The stock is seeing 52-week highs. A lifelong Warren Buffett favorite, the GPS price target estimates were boosted at Goldman Sachs because of the strength in sales at Old Navy.

Disclosure: No positions in the companies mentioned.

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