Let’s get real for a minute. Picking individual stocks in the stock market is gambling.
Clearly the mob of investors is out looking for stocks of companies that people who feel poor might shop at. But does it really make sense that Family Dollar is up so high? Well, first lets compare the two, with a twist – showing insider activity (the 1’s on the chart above the blue line):
The insiders at Family Dollar seem to like peaks. And they are active on the uptick, I suspect they know this psychologically driven gravy train won’t last forever.
Next let’s look at Family Dollar’s revenue quarterly through 2008:
1Q08 – 1,753,833
2Q08 — 1,765,777
3Q08 — 1,702,197
4Q08 — 1,832,611
A bit of a jump at the end – 7% increase. But… earnings remains relatively constant:
1Q08 – $59,289
2Q08 – $53,151
3Q08 – $64,673
4Q08 – $63,303
Now lets skip all the stuff in between and look at Target’s earnings:
That’s right – up almost 400%. And the revenue figures were up markedly too.
Yet’ Family Dollar stock is up 60% and Target’s down 30%
I sense that Target insiders are buying now. If smart, as rapidly as Family Dollar’s insiders are selling.