Has Sandy Offered a Buying Opportunity for Macy’s Stock?

December 10, 2012

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Macy’s barely qualifies for ‘Normal.’ It’s a little on the high side, but there are much weaker situations out there. Macy’s debt-to-equity ratio is also weaker than competitors, J.C. Penney Company (NYSE:JCP) and Target Corporation (NYSE:TGT). In regards to cash vs. long-term debt, there is room for improvement. .

	Debt-To-Equity	Cash	Long-Term Debt
M	1.25	$1.26 Billion	$6.94 Billion
JCP	.84	$525 Million	$2.94 Billion
TGT	1.14	$1.47 Billion	$18.55 Billion

T = Technicals on the Stock Chart Are Average

Macy’s had a great run over the past three years, but the stock has traded sideways over the past three months. It has also performed poorly over the past month.

	1 Month	Year-To-Date	1 Year	3 Year
M	-5.92%	22.88%	20.38%	153.70%
JCP	-22.91%	-47.79%	-44.89%	-30.54%
TGT	-1.31%	24.22%	18.57%	44.72%

At $38.92, Macy’s is currently trading close to all its averages.

50-Day SMA	39.43
100-Day SMA	38.65
200-Day SMA	38.29

E = Earnings and Revenue Are Inconsistent

Revenue and earnings for Macy’s wildly inconsistent over the past five years, but 2012 has seen improvement in both areas.

	2008	2009	2010	2011	2012
Revenue ($)in billions	26.31	24.89	23.49	25.00	26.40
Diluted EPS ($)	1.97	-11.34	.78	1.98	2.92

Quarterly revenue and earnings tell the same story in a relative sense.

	10/2011	1/2012	4/2012	7/2012	10/2012
Revenue ($)in billions	5.85	8.72	6.14	6.12	6.08
Diluted EPS ($)	.32	1.75	.43	.67	.36

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