It’s no secret that the market has melted down since 2016 rang its bell. The three major indices are in correction territory, and the majority of stocks have taken the tumble with them. At this point, I think a lot of stocks are oversold, but there are also a lot of charts that are broken. On the flip side, though, some really great opportunities are also developing.
The market is all about emotion right now. I know that’s unsettling, but history shows that these are the times in which real wealth-building opportunities are created. Pullbacks are where we add that oomph to our portfolios. That’s the silver lining to these choppy times.
To be honest, I love and hate these periods. I love them because they are a great time to plant seeds to big money, but I hate them because so many good people make poor decisions.
We’re not going to be those people. Of course, there are times to hold more cash and times to be cool. But now is the time to jump on the opportunities that the market is almost literally throwing our way. One of those is in a company that I’ve talked about briefly before, so today I want to take the time to really dig into it.
BURL Stock Set for a Recovery
Burlington Stores (BURL), known by many as Burlington Coat Factory, is a leading off-price retailer that sells both designer and name-brand merchandise at a 60%-70% discount to department store prices. It sells everything from coats, apparel and footwear to home décor and everything you could possibly need for a newborn child. In truth, the company’s motto says it all: “Burlington – a convenient one-stop experience with labels you love, at prices you’ll love even more!”
My mom put this company on my radar a long time ago. And as I’ve said before, my mom is the best stock picker I know. While she wasn’t looking at this company for its fundamentals — she just liked the bargains! — her pushing me to shop there turned me onto a stock that I now love, and I hope you will, too.
BURL made its IPO in October 2013 at $17 and since then has soared as high as $61.94 last March. That’s a 264% return in less than two years. While it was a relatively straight shot up, the stock has struggled with the market since its peak. But that doesn’t mean it can’t get back up there in time.
Earlier this week, BURL stock soared on news that management had reaffirmed its guidance for the fourth quarter and full year. (If you look really closely at the chart above you can see the spike.) As a result of the warm winter weather, the company is expecting flat comparable stores sales in the quarter and a 2% increase for the year, on earnings of $1.44 to $1.48 per share for the quarter and $2.28 per $2.30 a share for the year. Clearly this was good news, because the stock popped 14% the next day.
And I think it still has a long way to go. Unlike the majority of the market, BURL is in the green for the year so far, and I think this is only the beginning of a long road to recovery. As I mentioned, I love this stock, and I see it going all the way back up to $60 in time. The market may throw us curveballs from time to time, but there’s no doubt that this is a stock that can withstand the volatility in the end.
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