Wal-Mart Stores, Inc. (WMT), Target Corporation (TGT): Sell these Three Companies Before a Drop

Target is not a buy in this market

Similar to Dollarama and Wal-Mart Stores, Inc. (NYSE:WMT), Target Corporation (NYSE:TGT) has its work cut out for it in order to keep profits flowing. The company has positioned itself nicely with investors and is now making a move into the Canadian market. I see earnings falling more in line with what they were prior to the recession, as the economy essentially looks positioned to regain its pre-recession status within the next few years. This is evidenced in increased activity and rising prices in the housing sector, and well as improvements in jobs creations. While I would hold off buying Target Corporation (NYSE:TGT) until the stock drops in price to near its pre-recession level (which may happen in light of a recovery), the company’s expansion efforts into Canada, coupled with it being a relatively recession-proof firm, would likely improve your portfolio if the stock is bought at the right price.

Getting out now

All three companies haven’t recently experienced the types of gains they accrued in the years following the recession, but their share prices haven’t fallen substantially. It’s best to get out now. On the one hand, you have positive economic indicators and, on the other, you have falling profits at bargain stores. It is only logical to assume that the overall trend is leaning towards an economy similar to the one prior to the recession — one where fewer people shopped at bargain stores.

The article Sell these 3 Companies Before a Drop originally appeared on Fool.com and is written by Phillip Woolgar.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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