Why Ross Stores is Poised to Outperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, off-price apparel and home fashion retailer Ross Stores (NASDAQ: ROST  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Ross Stores and see what CAPS investors are saying about the stock right now.

Ross Stores facts

Headquarters (Founded)

Pleasanton, Calif. (1957)

Market Cap

$12.2 billion

Industry

Apparel retail

Trailing-12-Month Revenue

$9.4 billion

Management

CEO Michael Balmuth
COO Michael O'Sullivan

Return on Equity (Average, Past 3 Years)

46%

Cash/Debt

$625.4 million / $150.0 million

Dividend Yield

1%

Competitors

Kohl's (NYSE: KSS  )
TJX
(NYSE: TJX  )
Wal-Mart Stores
(NYSE: WMT  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 92% of the 411 members who have rated Ross Stores believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, huddaman, tapped Ross Stores as a relatively attractive retail opportunity:

Ross Stores on the surface appears to me as a more efficient operator compared to TJX. It has fewer stores, meaning better opportunity for expansion. Higher operating income per store is another plus. TJX in my opinion with its scale should have been getting better operating profit, but that's not the case. P/E is lower too than TJX. Debt at TJX is high at around [$775M]. [Ross Stores] has debt of [$150M]. However, that is not important, because both stores have sufficient cash to pay off the debt and yet have some left. They both have similar dividend yields, high ROE and ROIC.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 31, 2012, at 5:32 PM, mrudolph72 wrote:

    Got into ROST about a week ago. Looks crazy cheap to me. Here's to hoping for a nice gain in 2013.

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