The recent stock market rout has not been kind to discount retail king TJX Companies (NYSE:TJX). Once favorably looked upon as a retail survivor, the parent company of TJ Maxx, Marshalls and HomeGoods is now disregarded by investors as just another struggling retailer. Following Q3 numbers which underscored that those headwinds are only getting bigger for this company, TJX stock dropped more than 15% — matching its biggest correction over the past decade.

To me, this selloff looks more like an opportunity than anything else.

The same things that made TJX stock a winner over the past decade remain true today. The company is still king in the still growing off-price retail segment, and comparable sales and traffic trends are still positive and healthy. Meanwhile, margins are getting knocked down in the near term by higher wage and freight costs. But, those pressures are near term in nature. In the long run, they will normalize, and margins will rebound.

Also, there’s an overwhelming amount of data out there which shows that TJX, despite not participating in any big Black Friday sales, had a really strong Black Friday showing. The holiday season is the most important time of year for any retailer, so a strong start from TJX is a bullish indicator for TJX stock.

All together, there’s a lot to like about TJX stock on this selloff. The valuation is cheap. The fundamentals are strong. And the near-term outlook is dramatically improving. This combination of favorable factors should fuel a rebound rally in TJX stock into the end of the year.

Long-Term Fundamentals Remain Strong

TJX stock has dropped into correction territory because of Q3 numbers which included a big margin drop at the hands of higher freight and labor expenses. Namely, gross margins dropped 90 basis points year-over-year and pre-tax margins dropped 60 basis points year-over-year. Both of those are the biggest declines this company has seen in recent memory. Also, weakness is expected to persist, and higher freight and labor expenses are expected to chop off 5% from fourth-quarter EPS growth.

With the prospect of bigger tariffs just around the corner and the market increasingly worried about higher rates killing the consumer, these early warning signs from TJX were not well received by investors.

But, the long-term fundamentals underlying TJX stock remain strong. TJX’s businesses remain red hot, and continue to benefit from a secular shift towards off-price shopping. Marmaxx (TJ Maxx and Marshall’s) comparable sales were up 9% in the quarter, one of the best growth rates this division has reported in several quarters. Marmaxx has now reported positive comparable traffic growth for 17 consecutive quarters. HomeGoods comparable sales rose 7%, also a multi-quarter high. TJX Canada and TJX International both saw healthy 5% and 3% comparable sales increases, respectively, continuing a multi-quarter trend of low to mid single-digit comps in both of those segments.

Overall, the revenue picture at TJX remains robust. So long as the U.S. consumer remains healthy, revenue trends should remain healthy, too. Considering the rate hike cycle is possibly slowing and wages are still rising, the U.S. consumer is projected to remain healthy for the foreseeable future. Thus, the growth prospects underlying TJX’s revenue trends remain strong.

The big concern here is margins. Margins were weak last quarter. They will remain weak in the near term due to rising wages and higher freight expenses. But, this is a near-term phenomena. Rising wage pressures won’t adversely affect margins forever, nor will higher freight expenses. In the long run, these expenses will normalize, and TJX will benefit from margin expansion as stable revenue growth drives some opex leverage.

In the big picture, then, this is still a healthy revenue growth company with stable margins that have room to move higher. It is this exact combination which powered TJX stock from $5 to $50 over the past decade, and it will be this same combo which drives further gains over the next decade.

TJX Was a Big Black Friday Winner

Stocks that have dropped big need a catalyst to reverse course. Fortunately, TJX stock has that catalyst.

It has become increasingly clear that TJX was a big Black Friday winner. According to Black Friday data from mall traffic analytics firm Placer.ai, TJX’s flagship stores, TJ Maxx and Marshalls, were among the biggest winners in terms of year-over-year foot traffic increases during Black Friday 2018. TJ Maxx saw a foot traffic increase of 30%, while Marshalls foot traffic was up 28%. That compares favorably to less than 14% growth across all retailers that Placer.ai tracks.

Also, data from Google Trends shows that TJ Maxx was a big online winner, too. Search interest related to TJ Maxx spiked to all time highs this Black Friday, implying heavy web traffic during the most important time of the year for the retailer.

This is all especially impressive considering TJ Maxx doesn’t even run big Black Friday sales. Thus, this store saw a huge influx of traffic on Black Friday without additional markdowns.

Overall, it is pretty clear that TJX had a really strong start to the 2018 holiday season, and did so at healthy margins. This strong start is the exact catalyst TJX needs to get back on its winning path.

Bottom Line on TJX Stock

TJX stock has been knocked down on near-term margin concerns, but such concerns are overstated in the big picture. Long term, this company and stock are both winners.

Meanwhile, it has become increasingly clear that TJX was a big winner during Black Friday Cyber Monday, and this strong start to the 2018 holiday season is the exact catalyst TJX stock needs to resume its uptrend.

As of this writing, Luke Lango was long TJX.