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Andrew T. Gillies is Director of Communications at the Center for Audit Quality, an affiliate of the American Institute of CPAs, in Washington, DC. Based in Washington since 2002, he has also worked in editorial and communications roles at the Investment Company Institute, the World Bank, Forbes, and Vault.com. His policy-themed writing has focused on aerospace and defense, energy and environment, transportation, and financial services.

Friday, August 13, 2004

Shopping Retail Stocks

WASHINGTON, D.C. - High energy prices, terrorism angst and wobbly consumer spending make a toxic combination for retailers. Maybe that's why many retail stocks, down significantly from their 52-week highs, look cheap.

Giants like Wal-Mart Stores, Home Depot, and Lowe's popped up on our fairly tough stock scan of the retailing sector. Among other criteria, we required that current ratios of price to book value, earnings and sales all stand below their five-year averages.

We also consulted with two money men, and both agreed there are investment opportunities in retail. One is Robert Straus, portfolio manager of the $201 million Icon Consumer Discretionary Fund. Straus thinks fear and uncertainty have soured investors on stocks, particularly small caps, despite recovering earnings.

"We're seeing a disconnect between economic fundamentals and actual sentiment in the marketplace," Straus says.

Full story at Forbes.com