For Immediate Release
Chicago, IL – November 17, 2011 – Stocks featured in this week’s Zacks Industry Rank analysis include Saks ( SKS), Family Dollar ( FDO), Bed Bath & Beyond (BBBY) and Macy’s ( M).
Zacks Industry Rank Analysis is written by Dirk Van Dijk, CFA, Chief Equity Strategist, Zacks.com.
Retail Still Rolling
The Zacks industry classifications are very fine, with 258 different industries tracked. It is not particularly noteworthy if a single small industry shows up doing well, a single firm with good news can propel a one or two firm industry to the top (or bottom) of the charts. It is interesting when you see a cluster of similar industries at the top of the list. The same holds true for the bottom of the list.
The definition of size that matters here is not the total sales or market capitalization but the number of companies in the “industry.” Honestly I think we cut the definitions of an “industry” too fine, but when 10 of the 15 groupings that make up what one thinks of as “Retail” overall are in the top 50, the story is pretty clear regardless of how small we make the groupings.
Retail Takes 6 of Top 20
There are six different Retail “industries” clustered in the top “20,” although due to ties, the rankings jump from 18 to 32. Some of them are on the small side, with two of them having just four members. Others, including Drug Stores and Auto dealers are larger than average with 11 members. None of the ten “industries” saw an increase in its average Zacks Rank, although some slipped a few places in the ranking from last week.
If the Zacks Ranks were distributed randomly, one would expect that only 5% of the members of these “industries” would earn the coveted Zacks #1 Rank (Strong Buy). Instead, 16 of the total of 96 (16.7%) have earned that distinction. If it were random, only 15% would hold Zacks #2 Ranks (Buy) but actually 36, or 37.5%, hold it.
In terms of target shoppers, the firms range from those that cater to the very wealthy, such as the high-end department store chain Saks ( SKS) to those that cater to a decidedly less affluent clientele such as Family Dollar ( FDO). That would also probably hit sales at some of the mid-range stores such as Bed Bath & Beyond (BBBY) or Macy’s ( M) that currently hold number Zacks #1 Ranks.
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Contact: Dirk Van Dijk, CFA
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