I don’t know if I have ever been to a Kohl’s. I have been around a Kohl’s, but I’m not even sure what Kohl’s sells. Ah, evidently here is what they do:
Kohl’s Corporation operates department stores in the United States. Its stores offer private, exclusive, and national branded apparel, footwear, and accessories for women, men, and children; soft home products, such as sheets and pillows; and housewares targeted to middle-income customers.
How about that.
You have to love how they dress up that description “private, exclusive…middle-income”. Being a vagrant from coal country, I am well aware that nothing says “private” and “exclusive” like some shit you purchase from a big box store. Just make sure you pick up that 20 oz. Mountain Dew at the vending machine right next to the check-out line to quench your thirst prior to leaving to complete the ambiance.
Why am I rambling on about this stupid store? Good question. I highlighted $KSS in a post I wrote the other day regarding stocks that The PPT was flagging as OVERSOLD. Let’s take a peek at $KSS on three different time frames and see if there is something of value we can parse out of this.
$KSS Daily
$KSS Weekly
$KSS Monthly
What is clear is that for almost 14 years. the pricing area between 40 and 45 holds some pretty significant value as an area of congestion. First as resistance, and then, repeatedly (other than in 2008) has served as a place where buyers would defend the price.
Why is this of interest to us? Well, $KSS clearly got slammed on 11/29 (shitty same-store sales)…that sucks if you were a shareholder prior, but it has created a situation where we can potentially slowly leg into a position with the expectation that buyers will step in to keep prices buoyed above 42.
This would certainly fall under the umbrella of a “long term” trade (i.e. 6 month hold minimum) for me.
Basically, If I were to start a position, I would wait to see if and/or when the stock trades back down to the post 11/29 lows for use as a barometer. There is no need to be overly aggressive here, as there is plenty of room for upside. I am of the belief that it is best to let things play out for a while, slowly leg in with some small nibbles (all while trying to lock in a decent cost-basis).
The lows from June 2012 are at 42.7, the September 2011 lows are at 42.1. If price breaks (and remains) below the latter of those levels I would become increasingly skeptical about the possibility of a move back into the 50’s anytime soon.
$KSS just started paying a dividend last year, and gave shareholders at .07/share raise (to $0.32) in the March 2012 quarter. If things go well this year, I wouldn’t be surprised to see another raise next March. Trading at 44, $KSS pays 2.9%…so at these levels you can lock in a much better yield than you could have a month ago.
I’ll be returning here periodically to check on how this progresses and provide any updates I have regarding my positioning in the stock.
My best to you all.
-EM
