Fast Tracking for Ideas
Target is on the cover of the current issue of Fortune. I like shopping at Target, and the stock is down 30% from its 52-week high.
Fast Track results: Target failed 5 categories, so I would not go further with this idea.
Key points:
- Target has a lot of financial leverage with long-term debt as a percentage of total capital of 49.7%.
- Free cash flow has been declining since fiscal 2005, and came in at a negative $244 million last year.
- Consensus earnings estimates have been trending lower.
- The stock passed two valuation measures, and more than half the analysts covering the stock are not recommending purchase are positive factors.
The Company Stock Risk Profile Fast Track is a research tool for quickly and easily screening stocks for potential ideas. Fast Track is comprised of 10 key categories incorporating fundamentals, valuation and how management and the Street feel about the stock. I like to see a stock fail no more than 3 categories before putting the stock through the complete 50-category Company Stock Risk Profile research process. Most important, whatever screening tool you choose to use, always thoroughly research the stocks that pass your screen before buying.
