Recent news about the security breach at Target (TGT -0.44%) has predictably sent the company's shares lower in recent weeks. This decline was due to concern over slowing sales due to consumer lack of confidence. Are those fears overblown, though? Might it a good time to invest in Target?

Target has all the makings of a long-term investment. The second largest retailer in the world behind Wal-Mart, share prices ran up last year as a result of the company's expansion into Canada. Although the company did see worse-than-expected results from these new stores, Target has all the makings of a great business.

The company is shareholder friendly in that it has raised its dividend for more that 40 years and is currently trading at less that 13 times its cash flow. The recent drop in share price presents a new opportunity to add to shares or enter a new opinion.

Data breaches
Data breaches are not something new, nor are they going away anytime soon. As some of you may recall, an even larger retailer breach occurred in 2007 when customers of TJX Companies (TJX 0.19%) (the company that now owns Marshall's and TJ Maxx) had its credit card information stolen. According to CNN.com, it still is the largest breach ever and affected upwards of 94 million domestic and international accounts.

Of course, the full extent of the Target breach may not be fully realized yet. It is possible that the current breach may exceed previous records. The point is that the breach obviously has not affected TJX's long term growth. The company's stock has tripled since 2007 and obviously would have been a good investment at the time. Keep in mind, though, that TJX currently only pays a 1% dividend, as compared to Target's 3%.

It's been pre-disastered!
One of my favorite lines from the movie The World According To Garp was when Robin Williams watched as a plane flies into the home he and his wife are looking to buy. He decides to buy the house on the spot because the odds of two planes flying into the same house would be astronomical. The same thinking could be applied to companies like Target, Wal-Mart and TJX that have experienced a disaster.

You can rest assured that the webmasters and security experts working for Target have investigated, found, and plugged the cause of the breach. Moreover, the thieves also know that such action has been taken, so they will be off to other soft targets. CEO Gregg Steinhafel recently offered customers one year of credit monitoring and the assurance that they would have "zero liability for any fraudulent charges resulting from the intrusion."

Opportunity knocks
All great companies have their ups and downs that scare short-term thinkers (and don't let the door hit you on the way out), but these problems quickly forgotten as new and more relevant events unfold. One of my bigger regrets was waiting too long to get into Wal-Mart after it had a similar bad news event in April 2012.

The New York Times reported that the company was using bribes to expand and dominate in the Mexican market. According to Forbes, the scandal could cost Wal-Mart around $4.5 billion. Shares fell from $62 to $57 in a matter of days. It hasn't looked back since that day, however, and Wal-Mart is now in the mid-$70 range almost two years later. I recall wanting a further drop and then jump in, but it looks like Warren Buffet beat me to it.

Be honest, do you recall this incident? I didn't think so.

Final thoughts
According to Target's finance sheet, the company brought in over $70 billion in revenue last year. Even if the data breach costs $350 million (more than TJX), it likely will account for only a few days' worth of annual sales--hardly on a par with the burning of Rome. The recent market weakness presents an even greater opportunity to add shares of Target. The bottom line is that although this incident is a serious one, it will soon be forgotten and will have no lasting impact on Target's earnings power. The company will continue to grow and be good to investors by raising its annual dividend.