Monday, November 19, 2007

Nordstrom beats estimates

JWN 30.52, is traded up over 3 dollars after beating estimates. The retail stocks have already been priced as though we are in a recession, and are now surprising on the upside. It also appears that JWN is the biggest buyer of it's own stock, and they increased their buyback by another billion to $2.5 billion, having already bought back $750 million of shares.

Last week, Walmart surprised analysts. These retail companies, though bludgeoned have been very effective at making numbers-they've been squeezing their vendors and suppliers.

A "derivative value" play on retail is Sears Holding (SHLD 114.20), which today hit the low of the year. They bought a piece of Restoration Hardware, interupting plans that the CEO and private equity had who were trying to take the company private on the cheap. It's a small bit of change for Eddie Lampert but maybe it'll remind people that at one time Berkshire Hathaway was just a textile company.

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