Who Wins and Who Loses in Retail Today

Fourth-quarter results for Ulta Salon came in better than expected, with same-store sales and income both up around 9%. Also, as a refreshing change, Ulta was one retailer that did not post weakness this quarter and then blame the harsh winter weather for it.

On Friday's Investor Beat, host Chris Hill and Motley Fool analyst Ron Gross take a look at the importance of Ulta's multi-channel sales approach that helped them reach even those consumers who stayed home on snowy days, and Ron mentions that, although he likes the company very much, the stock may be a little pricey at these levels.

Then, regarding its data breach from late last year that resulted in the theft of millions of consumers' credit and debit card information, Target stated publicly yesterday that its security system had alerted it to suspicious activity after the company was hacked, but the company ultimately decided to ignore the warning. Chris and Ron take a look at the slow, but steady, continually emerging public relations nightmare that is slowly dragging Target down, headline by headline. Ron digs in further to the ignored warning, and says that, because a company of this size can get literally hundreds of such warnings of malware attacks per day, this particular chapter of Target's data breach saga probably shouldn't be thought of as completely management's fault.

Also, Castlight Health, a company that offers health information online to help inform medical choices and reduce insurance costs, had its IPO today, and saw shares promptly skyrocket. Shares were initially priced at $16 per share, and were nearly at $40 per share by market close, giving the tiny company that brings in $13 million in revenue per year a market cap of $3 billion. Is this one clear sign that the IPO market has shot dangerously far off into bubble territory? Ron notes that this is the ninth IPO to double on its first day of trading during the past nine months, which he sees as bubble territory. He also says that this worrying situation can leave investors jumping into stocks with sky-high valuations, buying the momentum, but ultimately setting themselves up for a fall, because they bought in at the wrong prices.

And finally, Ron tells investors why he'll be keeping a close eye on 3-D printing company ExOne in the week ahead. Now that the stock is off 48% from its high, Ron says that he's becoming interested at these valuations. As the company operates in the far more lucrative industrial manufacturing side of 3-D printing rather than the consumer-focused hobbyist side, Ron likes the space the company operates in, and will be watching closely when it reports earnings next Wednesday.

Now here are two retail stocks that win while others wane
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.


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