LRT Capital: “Shares of Target Corp. (TGT) are a Bargain 23x Trailing and 20x Forward Earnings”

LRT Capital Management, in its Q1 2021 investor letter, mentioned Target Corporation (NYSE: TGT), and shared their insights on the company. Target Corporation is a Minneapolis, Minnesota-based retail company that currently has a $113 billion market capitalization. Since the beginning of the year, TGT delivered a 28.88% return, extending its 12-month gains to 85.98%. As of May 27, 2021, the stock closed at $227.37 per share.

Here is what LRT Capital Management has to say about Target Corporation in its Q1 2021 investor letter:

“Target, the Minneapolis-based retailer, continues to fire on all cylinders as the company has reported two quarters in a row of +20% revenue growth (5% traffic growth + 15% average basket size6 ), coupled with the strongest EBITDA margins in over four years. The company has successfully navigated the Covid-19 pandemic with online sales growing by 155% and 118% during Q3 2020 and Q4, respectively.

On March 2nd, the company reported another stellar quarter, with same-store sales growing by over 20%, and both earnings (+57% YoY) and revenues (+21% YoY) beating estimates. The shares are up 14.11% year-to-date. We believe the shares are a bargain 23x trailing and 20x forward earnings.”

Our calculations show that Target Corporation (NYSE: TGT) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Target Corporation was in 17 hedge fund portfolios, compared to 18 funds in the fourth quarter of 2020. TGT delivered a 24.08% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.

Disclosure: None. This article is originally published at Insider Monkey.