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Hey OP. TGT isn't a bad stock to own. It's share price has fallen as it's being hit very hard on the inflation front. Many of their workers are lower paid, and turnover is greater as wages are rising in substitution roles. Also, they are experiencing product price inflation across the board. Hence the PE you are seeing is an expectation by some that their profits will fall in the future. That, combined with a relatively rough outlook for most stocks at the moment, has lead the board to a general pessimism at the moment.
The WMT vs TGT delta is a premium assigned to WMT for their supply chain and their online shopping. The latter is seen as having better growth prospects than traditional brick and motor stores. Amazon has constantly plagued the industry as well.
What might make more sense is to take a variety of industries and choose your favorite from each. Maybe one bank, one utility, one materials maker, one tech company etc....and divide your money that way. In that way you'll see how news affects each industry....as often grouped stocks will all trade the same way.
Personally my favorite retailer stock is TSCO, but I have traded TGT in the past and generally made money with it. It's a good company to own. As others have said, a recession is generally hard on retail stocks, but it's hard on all stocks.
Conclusion: Worth a spot in a portfolio, but I wouldn't make it my sole stock to own.
That's ridiculous, there are plenty of brick and mortar retailers doing just fine...WMT, COST, HD, LOW, TJX, ROSS just to name a few.
Target never excited me though, I can buy mostly the same things at WMT for a better price so I just suck it up and go to WMT. The stores may not be as nice as TGT, but so what? That said, TGT looks like a solid long term buy right now. Short term they could go lower, so be prepared to average down as you build your position, and be prepared to hold for a while (3-5 years if need be) waiting for it to get to new highs. If you can do that, you should do quite well long term.
I’m not sure I’d consider target and Home Depot, Costco, lowes, tj max, Ross as competitors. Two are home improvement , two are extreme discounters and then you have a unicorn with Cost who’s entire profit(or close to it) comes from membership fees. None of these imo are comparable to target
WMT...best in class...everyone else is just playing along until they die just like KMART, JCP, AMES, and all of the other regional favorites that no longer exist.
Brick and Mortar retail is dying because i can sit in my home and buy anything in the world i wish to purchase and have it on my doorstep tomorrow morning. Maybe there are a few die-hards left who can still stand to go into a store, but do they really buy, or is it just the warmth they get from being in the store waiting for the price of that coat they really like to hit rock bottom?
I bought wmt near the covid dip and to date including dividends I’m currently down a small percentage. A month ago it was a different story…
Tgt on the other hand I bought at the same time and it’s doing much better.
Xom was a great buy… i sold it last week shortly after its all time high and am keeping some cash dormant, expecting a new dip in the next few months, and I’ll go all in on some generic crap… maybe even just voo or something.
The covid dip got me about 50% returns in the 2ish years… some stock like cpe got about 500%, while others kinda sat still like wmt mmm etc
Dal and wells fargo were also great when buffet sold off and tanked them. Made an easy 30-60% off them with a quick flip.
Good fun, long story short tgt is doing ok but given wmt’s steep decline recently, you might be right in that now is a decent time to buy that over tgt.
F has even done really well, up until recently. I was at about 200% gain with them, but it’s since dropped to about 100%
As a novice investor may be nuts to buy any individual stock, Target or Kroger or Krispy Kreme.
Don't know your budget & situation if you are out of debt, have an emergency fund. Don't know where you are working to have a 401k retirement plan with a match. Maybe you can get some company stock where you work. Maybe you can invest most money into funds or ETF's.
Maybe best to go to library or bookstore & learn about investing from multiple sources. Only invest in something you understand.
I’m not sure I’d consider target and Home Depot, Costco, lowes, tj max, Ross as competitors. Two are home improvement , two are extreme discounters and then you have a unicorn with Cost who’s entire profit(or close to it) comes from membership fees. None of these imo are comparable to target
I understand, and you’re absolutely right. I was replying to a blanket statement saying “brick and mortar” retailers were dead and was not comparing these companies to each other except that they are all solidly brick and mortar based retailers that are far from dead.
Target’s dividend isn’t “Extra cash” so that tells me you don’t understand how this works at all
I started my post saying that I am a "novice."
Dividends are cash that they give you the investor, instead of likely wasting it on something else.
Quote:
Originally Posted by id77
Wal-Marts not being as nice or 'hip' as Target is actually a rather big deal. The 'typical' shopper at both has an income of $80k and (somewhat surprisingly) are both female, white, married and a couple other similarities, but the typical WMT shopper is 59.5 years old while the typical TGT shopper is 39. That gives me a cause for concern in the long-term.
I actually was poor in high school and was embarrassed to either get my clothes old from the Goodwill Store or new off brands from Walmart. I now realize that I shouldn't have cared and it didn't really hurt me socially at all.
I am well off with money now.
Quote:
Originally Posted by GWoodle
As a novice investor may be nuts to buy any individual stock, Target or Kroger or Krispy Kreme.
Don't know your budget & situation if you are out of debt, have an emergency fund. Don't know where you are working to have a 401k retirement plan with a match. Maybe you can get some company stock where you work. Maybe you can invest most money into funds or ETF's.
Maybe best to go to library or bookstore & learn about investing from multiple sources. Only invest in something you understand.
My husband and his family do very well. We have no debt and paid off real estate rentals. This is more for a fun competition.
Dividends are cash that they give you the investor, instead of likely wasting it on something else.
Dividends are the company giving you some of your own money back in a potentially taxable form. Then you are forced to reinvest those dollars if you want to keep your original investment the same. It’s not a bonus, it’s not free, it was yours already
So, I am a novice at stocks, but think Target is a good stock. I was looking to get feedback for and against...
What are your thoughts? I need to be my husband over the course of a year.
Because you are a novice, IMHO you should think about this a bit differently. Investing for a novice should not be about selecting individual stocks; a good mutual fund or exchange traded fund (basically the same things) allows you to buy a basket of stocks. This is usually called "diversification." The general idea of diversification is that you don't want to put all your eggs in one basket.
There is a ton of empirical research that basically says the price of any stock today ALREADY reflects all publicly available information, including for example the points you made in your original post. It is called the Efficient Markets Hypothesis, or EMH. Now, that might not literally be true of every stock at every point in time, but the evidence shows stocks in general, and large company stocks in particular, do indeed conform to the EMH. The implication is for regular people like those of us on this forum (myself included), conducting in depth analysis of a company's future prospects is largely a waste of time and effort, because we are not going to uncover any new nugget of information that other investors have somehow missed - today's price of TGT already incorporates every piece of available information.
So what should a novice do?
The general approach is usually summarized as follows:
1) understand your tolerance for risk. Understand how much of your hard earned money you are willing to lose. This is harder than one might think; in general, people might think they are willing to accept, say, a possibility of a 20% loss in exchange for the possibility of a 40% gain, but that's in abstract. Do a google search on "risk tolerance questionnaire" https://www.google.com/search?q=risk...+questionnaire and you'll find many online questionnaires to help you understand your risk tolerance.
2) understand what we mean by the phrase "asset class." An "asset class" (https://www.investopedia.com/terms/a/assetclasses.asp) is is a grouping of investment possibilities that exhibit similar characteristics and are subject to the same laws and regulations. Equities (stocks) are one asset class. Bonds are another asset class. Real estate is yet another. So is fine art, jewelry, commodities, etc. Asset classes are thus made up of things that often behave similarly to one another in the marketplace.
Here is a chart showing the past 10 years of performance of 9 popular asset classes:
Large Cap Equity (S&P 500) measures the perforomance of large capitalization US stocks
Small Cap Equity (Russell 200) measures the performance of small capitalization US stocks.
Developed ex-US Equity (MSCI World ex USA) measures the performance of large and mid capitalizaiton stocks in Europe, the Middle East, the Pacific region, and Canada
Emerging Market Equity (MSCI Emerging Markets) measures the performance of stocks in 25 emerging countries around the world
US Fixed Income (Bloomberg US Aggregate Bond Index) includes US Government, corporate, and mortgage backed bonds with maturities of at least one year
High Yield (Bloomberg High Yield Bond Index) includes non-investment grade taxable corporate bonds
Global ex-US Finxed Income (Bloomberg Global Aggregate ex-US Bond Index) includes bonds around the world
Real Estate (FTSE EPRA Nareit Developed REIT Index) measures performance of companies engaged in specific real estate activities in North America, Europe and Asia
Cash Equivalent (90-day T-Bill) is backed by the US Government and is considered risk-free
When you look at the chart, you'll see there really is no pattern. So, as an investor, each of us should focus on "what percentage of our money do we want invested in each of those 9 asset classes?" Think of it as a pie chart - how big do you want the slice allocated to big companies such as Target?
And, don't invest in Target but rather invest in market basket of stocks such as the S&P 500. There are several very good funds that include the largest companies in the US, including SPY, VOO, VONE, FZROX, and others. Buying just one stock such as Target is placing a bet on your ability to outthink the market; instead buying one of these broad funds isn't attempting to outthink the market but rather investing in the long term prospects of the US economy.
Last edited by moguldreamer; 06-24-2022 at 10:02 AM..
In my area, there is a huge difference between Walmart and Target. My Target has a Starbucks. Let that sink in for a moment. That said, I considered buying Target stock after I learned that Target planned on allowing EBT customers to use their SNAP benefits for groceries ordered online. In addition, the SNAP customers could have their groceries delivered to their home. My immediate thought was to buy its stock after taking into consideration that SNAP benefits should increase consistent with inflation. Then, of course, Target issued its quarterly report. I believe that Target can climb its way out of its hole, but I'm not quite ready to buy its stock, yet.
As a novice investor may be nuts to buy any individual stock, Target or Kroger or Krispy Kreme.
Don't know your budget & situation if you are out of debt, have an emergency fund. Don't know where you are working to have a 401k retirement plan with a match. Maybe you can get some company stock where you work. Maybe you can invest most money into funds or ETF's.
Maybe best to go to library or bookstore & learn about investing from multiple sources. Only invest in something you understand.
Could not disagree more with this. Will novices make mistakes. Yes. Better to learn them when you are trading 5k as opposed to 5M and having a midlife crisis. Op wants to buy TGT, not dogecoin or some triple leveraged financial tool. TGT is fine to learn from. Plus for actual learning, starting in a bear market is actually the best time to learn.
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