Michael Burry’s Latest Warning on Bullwhip Effect and 5 Retail Stocks to Watch

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In this article, we discuss Michael Burry’s latest warning on the bullwhip effect and 5 retail stocks to watch. If you want to read about some more retail stocks to watch, go directly to Michael Burry’s Latest Warning on Bullwhip Effect and 10 Retail Stocks to Watch.

5. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders: 50    

Target Corporation (NYSE:TGT) is a general merchandise retailer. The firm recently announced that it would take “additional markdowns to remove excess inventory and cancel orders” as it seeks to create additional flexibility. However, the firm also said it would take pricing actions amid unusually high transportation and fuel costs. The firm expects the operating margin rate to fall to around 2.0% for the second quarter in light of these measures against consensus estimates of 6.5%. It hopes to have the rate up to 6% before the end of the year. 

On June 10, Credit Suisse analyst Robert Moskow maintained an Outperform rating on Target Corporation (NYSE:TGT) stock with a price target of $180, noting the firm was focusing on “getting through the unwanted inventory resulting from consumers shifting their spending”. 

Among the hedge funds being tracked by Insider Monkey, Boston-based Arrowstreet Capital is a leading shareholder in Target Corporation (NYSE:TGT), with 2.5 million shares worth more than $530 million. 

In its Q2 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and Target Corporation (NYSE:TGT) was one of them. Here is what the fund said:

“We added Target Corporation (NYSE:TGT) to our consumer staples sector. Target Corporation (NYSE:TGT) offers a broad array of products in owned and known brand items at affordable prices. Its omni-channel fulfilment centers allow customers to receive their items via in-store pickup, curbside pickup, same-day shipping and regular shipping while simultaneously reducing operating costs. With a significantly lower valuation than peers and a unique operating strategy, Target Corporation (NYSE:TGT) is an attractive holding.”

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