timwest
Long

Target Corp TGT Daily -Oversold and CHEAP enough to buy

NYSE:TGT   TARGET CORP
262 2 3
I tallied up the last four quarters of earnings from the last 4 earnings reports and came to this conclusion:

$55.79 last / $4.03 TTM             earnings = 14 times trailing earnings = 7.1% earnings YIELD

Given all of the problems TGT             has had in the last year and they can still generate a decent profit then I think they can turn this ship around. I know it looks ugly but when you look at the valuation it gives enough margin of safety to generate a decent risk versus reward investment here.

I added some great fundamental data to the bottom of the graph: I added TOTAL REVENUES (in $Billions) and Target's AFTER TAX MARGIN. It shows flat revenues and a sharp drop in their margins. Granted, Wall Street thinks in a straight line many times and assumes that a falling line (after-tax margins) will continue to fall when in fact they already may have reached a bottom and are basing out and poised to rise.

I also have shown many of the earnings reports and how those levels create important support and resistance going forward. I also added the 1-year earnings trend-line (in light red) that connects 2 earnings reports that are 1-year apart. It is also interesting that these "lines" which no one sees, actually are somewhat useful at seeing support and resistance .

I think Target is cheap enough to buy here and I have labeled a box to represent the zone where I think the risk-reward makes sense. I would risk 3 times the average daily range upon entry on the long side of TGT             .

Tim 12:35PM EST, Friday, May 23, 2014
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timwest PRO
2 years ago
This idea is tracking almost exactly along with the forecast.
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gatorNic
2 years ago
good call so far
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