ROST time to buy...

While ROST is a retailer it is also a growth stock averaging over 22% over the past 30 years. It is considered Amazon proof unlike full price retailers and department stores.

I took profits last August and have been waiting for a new entry point. I held the stock for 11 months and I had an IRR of 28%. ROST has broken its 200 day SMA support and, as before, buy time should be approaching.

Denny Schlesinger


22% growth in revenue, earnings, or share price?

It looks very attractive as an investment; it’s just a matter of figuring out a good buy price, and you seem to have done that.

22% growth in revenue, earnings, or share price?

Share price! (Check Current CAGR and Average CAGR numbers in the chart linked below)

You can slice and dice the financial statements, the SEC filings, the news, and the discussion groups but at the end of the day you buy for X, sell for Y and your result is the difference between X and Y. Unlike technology, off-price retail does not change much from decade to decade and if they have a history of 22% grow for a couple decades or more there is no reason to think it will not continue as long as they don’t mess with the business model or open too many stores*. That being the case, reversion to the mean of the stock price is a reasonable expectation. The mean, for this purpose, is not the mean of the prices themselves but the best fit growth line that you see in the Klein charts.

As you can see from the above chart, ROST does not deviate too far from the Average CAGR line in red but there are no guarantees. ROST basically flatlined from 2004 to 2009. That was a time when money could be made from trading the volatility.

Skechers (SKX) was a darling around here for a while and a lot of money was made from the volatility. But it’s not my kind of stock, too crazy, too fashion dependent!

If only investing were easy, we would all be stinking rich! LOL

Denny Schlesinger

  • Starbux had that problem, they simply opened too many stores and had to retrench. While I was more active in retail I figured out the maximum number of US stores that various kinds of retail businesses can handle. It’s a lot more for eateries than for clothing, for example, and more for off-price than for full-price.

OK, thanks, I’m catching on. 30 years!