This year has been challenging for investors. A slowing economy and high inflation are creating a poor outlook for markets. Yet buying during challenging moments can be a solid time to invest. That’s particularly true when investors sell as soon as skies are clear.
Many companies are facing challenges right now. But companies with a long operating history of succeeding in different environments should get through today’s troubles with ease… although it may take some time.
One company struggling now is Target (TGT). The “cheap chic” retailer has been cutting prices to clear inventory as consumer tastes have changed. But such a response is normal for retail, where trends can change in time. The company’s success will likely continue, and shares will move higher as markets do in time.
Action to take: Shares have gone from 1.3 times their price to sales to 0.72 times. Anything under 1 is a reasonable buy point for an industry-leading retailer like Target. Investors can also get a 2.6 percent dividend now, and the company has a good history of growth. All in all, this looks like one company investors can start buying now.
For traders, shares have been heading gradually higher since the company first reported their inventory issues in May. The January 2023 $200 calls, last going for about $4.90, offer mid-double-digit returns on a further move higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.