Tonight we are talking about retail. When starting you must have something substantial to start with. Do not just rush out and buy, wait until these drop a bit and do a ” ‘mon back.” Some are regional to national plays, some are just well run, some are concept plays and some have to be bought just due to consistency. The Top 10 can make you money and are all best of breed. These do not disappoint as much and they have much more upside surprise. They may be more expensive but they will make you more money.

• Best Buy Co Inc (BBY) – This is the best hard goods retailer in the U.S. and they are going worldwide. They are the dominant retailer in big screen TV’s. Forget Circuit City they are not as good. They sell everything and this gives them a lot they can do. If they stop being number one get out of the stock but it doesn’t look like this will happen anytime soon.
• Lowe’s (NYSE:LOW) – They are king of the hardware stores. Home Depot is king if you look at size but the key to LOW is the room they have to grow. Growth gives LOW the value here.
• Costco Wholesale Corp (COST) – This is the cheapest and best run of the warehouses. People will say Wal-Mart Stores Inc (WMT) because it is the biggest but COST is the best run and has the most room to grow. With your membership you never need to buy a warranty. The parking lot also shows the types of people that shop here, rich and poor. They pay employees well. You can go here to buy birthday cakes, crab meat, books, paintings, electronics, well everything.
• Men’s Wearhouse (NYSE:MW) – This company is one that investors need to take seriously. They continue to be innovative with new concepts that keep them growing. This is managed like a mom and pop business but this may be one of the most creative national chains.
• Federated Department Stores (FD) – They own Macy’s, Bloomingdale’s, Filene’s and Lord & Taylor. Now they have more capacity and the leeway to shut down the store that are doing poorly and keep the winners after buying May Department Stores. This acquisition gives them clout with suppliers. Only WMT beats them out now. The story here is high end, consumers looking for upscale things.
• Sears Holdings Corp (SHLD) – SHLD cannot be treated like any other retailer because of Ed Lampert who was working Wall Street at age 14. All this guy cares about is making the most money possible. SHLD is more a real estate story than a retail story but this will change.
• J.C. Penny (JCP) – Jim hasn’t been to a JCP store in ages but he likes them because they do the only thing that matters for a mature retail company: the stock consistently moves higher. They just added Sephora cosmetics counters to stores also. They carry brands that most consumers want, and if the company drops the ball it could be a buying opportunity for you.
• Coldwater Creek (CWTR) – They are not about consistency. This is a regional to national growth story with a ton of momentum. The growth is what makes this stock attractive.
• Starbucks (SBUX) – They have managed to do the impossible, they can charge $5 for coffee and get away with it. Jim said not to pay these prices for the stock but buy on weakness. SBUX creates ambiance and pays the employees well. These attitudes keep workers happy and in turn people coming back. They aspire to be a big CD retailer also. This is “yuppie heaven” so they may pull it off.
• Commerce Bancorp (CBH) – This isn’t a traditional retailer but a bank. They run the bank like a retailer, even calling branches stores. Performance is judged based on same store sales also. They have survived in good and bad times, even with high interest rates. Jim said they are “ready to rock with earnings.”