Merchandise Floods Into TJX Stores

Soft Goods Get Hard Results
If Richard Steinberg of Steinberg Global Asset Management wants to know how well companies are doing, one thing he does is talk to their shippers. So when an insider at a big trucking outfit told him that its business with TJX (TJX ) had jumped to its highest level in 10 years, he quickly loaded up on TJX shares. Ballooning shipments, he says, mean business has blossomed for TJX, the world's largest off-price retailer of soft goods, and inventory levels are improving.

In the U.S., it operates 742 T.J. Maxx stores, 658 Marshalls, 168 HomeGoods, and 89 A.J. Wrights. In Canada, it has 158 Winners and 23 HomeSense stores, and in Europe, 137 T.J. Maxx outlets. Yet the Street isn't hot on TJX, because it fears consumer spending may cool. But Steinberg thinks the stock, which has risen from 15 in February to 21.23, is trading at attractive levels relative to its peers, based on the ratio of its p-e to its growth rate. He figures it is worth 29, or 20 times his earnings forecast of $1.45 a share for 2005 (ending Jan. 31). The current price-earnings ratio is 14. His estimate for fiscal 2004 is $1.22. "TJX is a bargain," he says.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

By Gene G. Marcial

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