Red Flag: Does Insider Trading Signal Heightened Risk for Kohl’s Investors?

December 23, 2012

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Kohl’s isn’t exceptional, but it’s stronger than the debt-to-equity ratios for J.C. Penney Company (NYSE:JCP) and Macy’s (NYSE:M).

	Debt-To-Equity	Cash	Long-Term Debt
KSS	.73	$550 Million	$4.58 Billion
JCP	.84	$525 Million	$2.94 Billion
M	1.25	$1.26 Billion	$6.94 Billion

T = Technicals on the Stock Chart Are Weak

Kohl’s hasn’t performed well over the past three years. Macy’s has dominated this competition over that timeframe.

	1 Month	Year-To-Date	1 Year	3 Year
KSS	-13.47%	-6.58%	-4.23%	-11.90%
JCP	24.18%	-40.14%	-34.82%	-17.76%
M	-4.19%	23.78%	30.30%	140.10%

At $44.32, Kohl’s is currently trading below all its averages.

50-Day SMA	49.88
100-Day SMA	50.79
200-Day SMA	49.44

E = Earnings Have Been Steady

Revenue and earnings have been steadily increasing. The pace has been frustrating to some investors, but unlike J.C. Penney, Kohl’s is consistently profitable.

	2008	2009	2010	2011	2012
Revenue ($)in billions	16.47	16.39	17.18	18.39	18.80
Diluted EPS ($)	3.39	2.89	3.17	3.66	4.30

Looking at the last quarter on a YoY basis, we see an increase in revenue and earnings, which is a great sign.

	10/2011	1/2012	4/2012	7/2012	10/2012
Revenue ($)in billions	4.38	6.02	4.24	4.21	4.49
Diluted EPS ($)	.80	1.73	.63	1.00	.91

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