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4 Door-Buster Stocks

By Rick Munarriz - Updated Apr 5, 2017 at 5:01PM

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Bargains to be had at, and with, the retailers.

How early did you wake up on Friday?

For too many Americans, the alarm buzzed too early, and the roads soon filled up with sleepy-eyed drivers trekking to stores to take advantage of wee-hour bargains.

Retailers call them door-busters, perhaps because the biggest deals attract the biggest crowds hoping to obliterate the retailer doors that separate them from ridiculous markdowns.

However, those ridiculous markdowns aren't restricted to the limited number of sale items over the weekend. Many retail stocks are starting to look like door-busters, too. Investors have turned away from the sector, spooked by everything from a slowing economy to pesky fuel prices to bubbling minimum-wage hikes.

This kind of apathy doesn't scare me; it excites me. If you're investing in quality retailers built to last, now is the ideal time to scour the retailer bargain bins for your next great overstock deal. Because many retailers make more in the current quarter than they do in the previous three quarters combined, your timing couldn't be any better!

Let's get into a few chains I find appealing right now.

Hastings Entertainment (NASDAQ:HAST) -- $8.43
Things are going well at media retailer Hastings. The company posted better-than-expected results last week, hiking its guidance along the way. Hastings is now looking to earn between $0.88 a share and $0.92 a share this year, well more than its earlier forecast that called for a profit of no more than $0.68 a share.

Hastings fetches less than 10 times this year's outlook. If you don't think that's cheap, Hastings sure does. The company announced a share buyback after its healthy quarter, letting investors know it's ready to eat its own cooking at these attractive prices.

Cabela's (NYSE:CAB) -- $16.35
Outdoor-gear superstore concepts like Bass Pro Shops and Cabela's are sorely misunderstood. The large boxes appear overly lavish, complete with themed camping terrain, large aquarium tanks, and museum-like wildlife displays. Shopping is an adventure, yet the chains are positioned reasonably well for a tightfisted future because they provide a lot of entertainment bang in pursuit of the buck.

Sales continue to grow at Cabela's, though earnings dipped slightly this past quarter. With the stock now trading at just 10 times next year's analyst profit target of $1.62 per share in earnings, Cabela's is cheap. It's now better-looking prey than some of its snapshot-ready critter replicas.

Pier 1 Imports (NYSE:PIR) -- $3.97
It's hard to like Pier 1 these days. The home decor specialist is roughly two years away from returning to profitability. You can pin the blame on everything from the subprime flap to chain-specific flubs, but don't throw in its towel just yet.

Did you see how rival Restoration Hardware (NASDAQ:RSTO) became a market darling after receiving a private equity buyout bid and the potential of a sweeter offer from Sears (NASDAQ:SHLD)? If Sears walks away empty-handed from the Restoration Hardware sweepstakes, Pier 1 would make a respectable catch on the rebound.

Sure, it's not the same upmarket panache that Sears would achieve with Restoration Hardware, but the established Pier 1 would still be an upgrade over the nondescript home furnishings Sears sells now.

Ross Stores (NASDAQ:ROST) -- $26.22
Sluggish economies often translate into tough times at high-end apparel retailers. Well, if it's not quite hand-me-down fashions time yet, shoppers can save money building a new wardrobe by heading to their nearest Ross Stores location.

Ross offers discounted clothes and accessories. The company is doing just fine in this climate. Its latest quarter found sales and earnings per share climbing 8% and 16% higher, respectively. Gross and operating margins expanded during the period, a comforting sight in assessing a retail sector that may take on the form of a minefield if shoppers begin clutching their pocketbooks a little tighter. At just 12 times next year's projected profitability, Ross is as cheap as some of its silk blouses.

For more bargain-shopping Foolishness:

Cabela's is a Hidden Gems stock pick, and Sears is an Inside Value recommendation. Get a jump on your holiday shopping by checking free, 30-day trial subscription offers to both services.  

Longtime Fool contributor Rick Munarriz has been known to hit a door-buster deal or two on Black Friday, but didn't this year. He doesn't own shares in any company in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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Stocks Mentioned

Pier 1 Imports, Inc. Stock Quote
Pier 1 Imports, Inc.
Ross Stores, Inc. Stock Quote
Ross Stores, Inc.
$85.56 (1.58%) $1.33
Cabela's Incorporated Stock Quote
Cabela's Incorporated
Sears Holdings Corporation Stock Quote
Sears Holdings Corporation

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