Monday, 10 July 2017

M - broadly... horrific

Whilst the main market saw a day of moderate chop, there was significant weakness in Macy's (M), which settled -7.0% at $21.08. Near/mid term outlook remains bearish, as the stock has lost a horrific -68.8%, since the historic high of $67.67 in July 2015.

M, daily

M, monthly (linear scale)


I usually don't get time to highlight this stock, but the fact its broken another multi-year low merits it.

The 'box' retail remain within what is an outright collapse wave since summer 2015. Just consider that whilst the sp'500 climbed 13.7% since the May 2015 high, Macy's has declined by -68.8% from July 2015. That is unquestionably disastrous!

Macy's stock valuation is certainly on the low side, with a forward PE of around 7. As ever though, being retail, margins are tight, currently net profit margin is just 2.3%, and thats with the economy in a growth phases. What happens when the next recession hits?

A grander issue prospective 'bargain buyers' need to ask themselves... 'what is there really to look forward to?'. After all, AMZN, BABA, and others are continuing to push hard, cutting into Macy's customer base.

Key stats:

Yours truly has never been to a branch of Macy's... and probably never will.