I purchased ROST a couple weeks ago. It has solid numbers but appears to be falling recently. The story there is that ROST is predicting "only" an 8%-10% growth rate long term and everyone had been enjoying the high double digits. It still seems undervalued despite that.
Company Overview
Company Fundamentals
Fastgraphs.com shows that its average P/E ratio is actually its support in the past 3 years.
Earning Report Notes
Company and Industry specific commonly used acronyms and terms
None
Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.
ROSS STORES INC (ROST)
Last Updated: Q2 2014
Description: Ross Stores, Inc. is an off-price apparel and home fashion chain in the United States. The Company operates two brands of off-price retail apparel and home fashion stores: Ross Dress for Less (Ross) and dd’s DISCOUNTS. Ross offers designer apparel, accessories, footwear, and home fashions for the entire family at everyday savings of 20% to 60% off department and specialty store regular prices. Its merchandise offerings also include, but are not limited to, small furniture and furniture accents, educational toys and games, luggage, gourmet food and cookware, watches, and sporting goods.
How do they make money: Selling apparel and accessories that are slightly damaged or stitched wrong at a huge discount.
Key Brands: None company wide but sell many name brand clothes.
Company Overview
Ross also owns a chain of discount stores called dd’s Discounts. Unsure of the % mix
Best category: Juniors
Best geographic region: Texas
Strong buyback culture: Every year since 1993
Risks
Brick and Mortor store vs online: Their average sale is $10 which is hard to cover for shipping and handling. With returns, shipping etc that is hard to do online. Since Ross sells name brands at half off for their regular price there is less margin difference between them and online retailers.
Competitors
The TJ Companies (TJX)
The Steinmart (SMRT)
Company Fundamentals
Fastgraphs.com shows that its average P/E ratio is actually its support in the past 3 years.
Company Stats
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014e
|
5y Avg
|
10y Avg
|
Share Price
|
$11.33
|
$14.65
|
$12.79
|
$14.87
|
$21.36
|
$31.63
|
$47.53
|
$54.09
|
$74.93
|
$81.03
|
$57.84
|
$36.42
|
EPS
|
0.85
|
0.95
|
1.17
|
1.77
|
2.31
|
2.86
|
3.53
|
3.88
|
3.88
|
4.21
|
3.67
|
2.54
|
EPS Growth
|
-
|
11.76%
|
23.16%
|
51.28%
|
30.51%
|
23.81%
|
23.43%
|
9.92%
|
0.00%
|
8.51%
|
13.13%
|
20.26%
|
P/E
|
13.33
|
15.42
|
10.93
|
8.40
|
9.25
|
11.06
|
13.46
|
13.94
|
19.31
|
19.25
|
15.40
|
13.44
|
P/B
|
5.5
|
3.9
|
4.1
|
3.3
|
2.2
|
2.8
|
4
|
5
|
6.3
|
5
|
4.62
|
4.21
|
EPS growth for a retailer is very high and fairly consistent.
EPS growth has slowed from previous years causing a hit to share price but long term growth projection of the company is still good.
Dividend Stats
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014e
|
5y Avg
|
10y Avg
|
Dividend
|
$0.13
|
$0.16
|
$0.20
|
$0.24
|
$0.35
|
$0.47
|
$0.59
|
$0.71
|
$0.80
|
$0.92
|
$0.70
|
$0.46
|
Dividend Yield
|
1.15%
|
1.09%
|
1.56%
|
1.61%
|
1.64%
|
1.49%
|
1.24%
|
1.31%
|
1.07%
|
1.14%
|
1.25%
|
1.33%
|
Share buyback %
|
2.73%
|
3.17%
|
3.65%
|
4.18%
|
5.20%
|
4.17%
|
4.35%
|
3.14%
|
3.24%
|
-
|
3.73%
|
3.76%
|
Div Growth
|
-
|
23.08%
|
25.00%
|
20.00%
|
45.83%
|
34.29%
|
25.53%
|
20.34%
|
12.68%
|
15.00%
|
21.57%
|
24.64%
|
EPS Payout Ratio
|
15.29%
|
16.84%
|
17.09%
|
13.56%
|
15.15%
|
16.43%
|
16.71%
|
18.30%
|
20.62%
|
21.85%
|
18.78%
|
17.19%
|
Dividend growth has been slightly higher than the EPS growth but payout ratio is still very low allowing for large future dividend growth. Even with the lower projected growth rate there is a lot of room for dividend raises.
Earning Report Notes
Q1 2014
EPS: $1.15 (+7% Y/Y)
Sales: +6%
Operating Margin: 14.6% (very high for a retailer)
26 Ross stores and 7 Discount stores opened in quarter (75 Ross and 25 Discount stores planned for the year)
Share buyback plan: $550 million a year (~3.5% a year)
Estimate $4.15 EPS for the year.
Q4 2013
EPS: $1.02
Sales: +2%
Full Year
EPS: $3.88 (+13%)
Sales: +3%
Operating Margin: 13.1%
Barbara Rentler new CEO June 1st.
Company and Industry specific commonly used acronyms and terms
None
Resources
Company Website: http://www.rossstores.com/#
Investor Relations: http://phx.corporate-ir.net/phoenix.zhtml?c=64847&p=irol-stockQuote
Morningstar: http://quotes.morningstar.com/stock/rost/s?t=rost
Transcripts: http://seekingalpha.com/symbol/ROST/transcriptsDisclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.
