Does Kohl’s Stock Still Hold Value?

Does Kohl’s Stock Still Hold Value?

Shares of Kohl’s (NYSE:KSS) have risen about 50% over the past year as investors rewarded the department store giant for improving sales trends. However, Kohl’s stock has fallen by about 15% since peaking earlier this year.

Meanwhile, industry conditions are set to become more favorable, mainly due to the pending liquidation of Bon-Ton Stores. Kohl’s stock is also quite cheap, particularly when valued based on its free cash flow. That makes the No. 2 U.S. department store chain a compelling long-term investment opportunity.

Sales growth rebounded during 2017
Up until about a year ago, Kohl’s was struggling just like most of its peers in the department store sector. Comp sales fell 2.4% year over year in fiscal 2016 and 2.7% in the first quarter of fiscal 2017. That’s a big reason why Kohl’s stock lost more than half of its value between early 2015 and mid-2017.

Fortunately, sales trends started to improve in the middle of last year. Comp sales slipped just 0.4% year over year in the second quarter and inched up 0.1% in the third quarter.

Kohl’s sales trajectory then accelerated dramatically during the holiday season. In the combined November-December period, comp sales surged 6.9%. For the full fourth quarter, comp sales rose 6.3%. This stellar performance allowed Kohl’s to post full-year adjusted earnings per share of $4.31– far ahead of its initial guidance of $3.50 to $3.80.

The sales opportunity just got bigger
For fiscal 2018, which began in February, Kohl’s projects that comp sales will rise 0% to 2%. Comp sales growth is expected to exceed the high end of that full-year forecast in the first half of the fiscal year before slowing in the second half of the year.

This guidance may be overly conservative. Kohl’s experienced a sharp change in its sales trend last year, and management probably doesn’t want to overpromise, particularly when the company will face a tough year-over-year comparison in the fourth quarter. Overall industry conditions remain very favorable, though, with GDP likely to grow at a robust pace and consumers benefiting from tax cuts.

Furthermore, Kohl’s could be a big beneficiary of Bon-Ton’s demise. There is significant geographic overlap between the two: 35% of Bon-Ton’s store base is within one mile of a Kohl’s location, and 71% of its stores are within five miles of a Kohl’s, according to a recent Morgan Stanley analysis. This represents a valuable opportunity to increase sales and earnings, which would give Kohl’s stock a boost.

The only department store operator that has more overlap with Bon-Ton is Sears Holdings, which is rapidly losing market share itself. Meanwhile, TJX Companies is the only other fashion retailer with comparable exposure to Bon-Ton’s local markets.

TJX and Kohl’s are both likely to achieve substantial sales gains after Bon-Ton closes the remainder of its stores this summer. TJX probably has more merchandise overlap with Bon-Ton, but it doesn’t carry full collections, so it takes more effort to find the hidden gems in its stores. By contrast, Kohl’s merchandise assortment tends toward more moderately-priced brands, but it will be one of the few department stores left in many of Bon-Ton’s smaller markets.

The timing of Bon-Ton’s liquidation means that most of the incremental sales will come in the second half of fiscal 2018. That should help Kohl’s continue posting solid comp sales growth even as the year-over-year comparisons become tougher.

Kohl’s stock looks like a bargain
Kohl’s initial forecast for fiscal 2018 calls for EPS of $4.95-$5.45. Based on the midpoint of this guidance range, Kohl’s stock currently trades for about 11 times forward earnings.

That’s not as cheap as some other department store stocks. However, as noted above, Kohl’s may be underestimating its sales potential, particularly in light of the Bon-Ton liquidation. Kohl’s surpassed the high end of its initial 2017 EPS forecast by more than 10%, and it’s certainly possible that it could achieve a similar earnings beat this year.

Additionally, Kohl’s has a much better balance sheet than most of its peers. It ended fiscal 2017 with $2.8 billion of long-term debt and $1.7 billion of capital-lease obligations. Just last week, Kohl’s paid down about $500 million of its debt, giving it an even cleaner balance sheet.

Finally, free cash flow has routinely exceeded net income at Kohl’s in recent years. This trend is set to continue in 2018. Based on Kohl’s plans to limit capital expenditures to $700 million and reduce its inventory, free cash flow could be as high as $8 per share this year.

That makes Kohl’s stock look like a bargain at its recent trading price below $60. If the company can continue gaining market share from weaker competitors while executing its plan to sublease excess retail space to high-traffic grocery and convenience stores, Kohl’s stock could potentially reach triple-digit territory in the next few years.


Former U.S. Congressman Warns Stock Market Will be Slashed In Half

Former U.S. Congressman Warns Stock Market Will be Slashed In Half


Former U.S. Congressman warns a ‘Calamity’ could cut this Stock Market in half

New Guide Offers Tremendous Opportunity in Gold

This is probably the most important guide you will read this year. What you do with this information could mean the difference between losing up to half the value of your IRA/401(k) or by taking one simple action, making up to 150%.

You see, this year has been a brutal one for the stock market, it’s been one step forward and two steps back. All of 2018’s gains have vanished in just weeks. Over $1.6 trillion was lost in just three days. This has served as a STRONG reminder – the stock market is LONG OVERDUE FOR A CRASH.

Many smart and very wealthy individuals – including banks – have been warning this next crash is near and will be the BIGGEST of all.

Jim Rickards warns: The Next Financial Panic Will Be The BIGGEST Of ALL.

Morgan Stanley says: Stock Slide Was APPETIZER For Real Deal.

Billionaire Carl Icahn says: There’s A Dangerous Bubble In The Hottest Investment Products On The Market.

But you see, there is something you can do right now to protect your IRA/401(k) and savings accounts.

During the last crash there was one investment that more than DOUBLED from 2008 to 2012: Gold. And the people who made MASSIVE gains did so by preparing early. This may be your last opportunity to prepare before the NEXT BIG CRASH.

It’s all covered in Chapter 4 & 5 of this New Guide: The Fiscal Crisis and What You Can Do to PREPARE.

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Bill Gates says: It’s a CERTAINTY that we will have another financial crisis like in 2008, so I URGE you to get your FREE GUIDE NOW. As soon as the crash comes it wouldn’t surprise me if gold doubled and silver tripled.

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David Buchanan
The Hartford Gold Group

This Complete Guide Uncovers:
– The IRA Loophole that could literally save your retirement
– How to prepare for the next Financial Crisis using Gold & Silver
– Taxable advantages of owning Gold & Silver



What Will Happen To Facebook Stocks

What Will Happen To Facebook Stocks

For better or worse, Facebook (FB, $163.87) CEO Mark Zuckerberg is getting pretty good at handling Washington, D.C. He just wrapped up his second Congressional grilling in six months, and managed to come out of it looking better than he did going in.

That wasn’t the case in October, when he and executives from Alphabet (GOOGL) and Twitter (TWTR) were all on the hot seat for their role in displaying foreign-purchased political ads that intended to sway the results of 2016’s presidential election.

A curious detail inadvertently surfaced during the hearing, however. Based on the questions the Senate committee’s members were asking – the same lawmakers that, in theory, would be the ones to assemble a bill making Facebook a regulated entity, if they wanted to go that far – it’s clear that many people in Congress have no clue how Facebook works, or even what it really is.

But this lack of knowledge won’t prevent them from thinking about new laws in response to the recent Cambridge Analytica scandal that exposed 87 million Facebook users to an entity that wasn’t authorized to tap into that private information. South Carolina Senator Lindsey Graham flatly said during the hearing, “It could possibly take the creation of new laws and regulations to deal with this platform. But I do believe this: continued self-regulation is not the right answer when it comes to dealing with the abuses we have seen on Facebook.”

If Graham’s philosophy is the prevailing one in Washington right now, Facebook has a big problem. On the other hand, philosophy doesn’t always lead to action – and that sets the stage for a different, more likely outcome.

Congress Probably Won’t Do Much
It’s a sticky wicket. On the one hand, Facebook hasn’t established that it can be trusted with consumers’ personal information. On the other hand, the men and women who would be responsible for creating new laws to regulate how Facebook functions don’t have a firm enough grasp on the Facebook platform to pen meaningful legislation.

Case in point: Utah Sen. Orrin Hatch’s question, “How do you sustain a business model in which users don’t pay for your service?”

From someone else in a different context, the query may have been understood as rhetorical, and leading to a bigger point. That wasn’t the case here. Hatch genuinely didn’t seem to understand that Facebook runs ads. The exchange calls into question whether the senator understood even how Cambridge Analytica could have swayed voter opinions during 2016’s presidential campaigning.

Other unfortunate questions include the result of emailing within WhatsApp (which isn’t an email platform), and Graham’s query, “Is Twitter the same as what you do?” It is, and yet it isn’t, but comparing the two is impossible to non-users of either.

Lawmakers’ lack of knowledge about how Facebook – or the web, for that matter – doesn’t inherently disqualify them from shaping new regulation. In a more philosophical sense, though, perhaps Congress’ lack of understanding of Facebook should preclude elected officials from even trying to meddle, as overreach and underreach are both distinct possibilities. At the very least, they could punt the matter to another body.

The Federal Trade Commission is the best obvious solution. That’s the way Andy Sambandam, founder and CEO of Philadelphia-based data privacy company Clarip, sees it anyway. He says, “Currently, the FTC enforces privacy standards under its power to prevent deceptive trade practices. It will most likely continue to be the FTC, as both the House Browser Act and the Senate Consent Act will keep it there.”

He adds, “Both the House Browser Act and Senate Consent Act provide for greater transparency and control for consumers. Although they wouldn’t eliminate the risk of another Cambridge Analytica, they would be a solid first step to protect the data privacy of Americans and increase trust in technology businesses.”

The solution may be as simple as a phone call to FTC Commissioner Maureen Ohlhausen, asking her for tougher enforcement of privacy violations, and greater clarity as to what’s allowed. The commission also can make new rules as needed regarding “unfair or deceptive practices.”

But even that may be the overreach some Senate committee members fear.

Andrew Selepak, director of the University of Florida’s graduate program in social media, says, “There simply isn’t the political will to regulate Facebook. Even if laws are proposed and grand speeches made on the House and Senate floor, social media and the web work by collecting our data and sharing it with third parties.”

Ergo, if consumers are expecting meaningful changes in the way its privacy is protected by Facebook – and all internet-based companies, for that matter – the bulk of any paradigm shift is going to be made voluntarily.

That’s the direction things seem to be going for Facebook.

“Mark Zuckerberg has now told Congress he plans for the company to limit contact data, provide new Terms of Service, curb ad targeting and reviewing political ads before they go live,” says Baruch College marketing professor Robb Hecht. “Zuckerberg gestured to a version of Facebook which people would pay for and be ad-free. He also suggested political campaign advertising would be reviewed before going live on the platform.”

However, it’s not as simple as it sounds, Sambandam says. “Facebook can’t self-regulate on privacy because it is simply not in their business interest – their revenue model highly depends on leveraging usage data and selling it to advertisers,” he says. “Even if Facebook could regulate itself, it is unlikely that other businesses will adopt the full range of privacy protections needed without government regulation.”

Realistically speaking, Facebook likely will apply some sort of hybrid solution to the problem that doesn’t exactly lead to the establishment of new regulations. Zuckerberg may impose new internal rules – some of which Hecht theorized – that passively win the unspoken approval of Congress, resulting in no required action on their part.

It’s a slight step back from his vocal support for the “right” regulation of Facebook. But it’s still a victory for FB and its shareholders, though, as it allows the social networking giant to shape the very rules it will have to play by.

Bottom Line
While the recent testimony from Zuckerberg to a Senate committee willing to explore and act on the matter of online privacy looks like it resulted in progress, once the dust settles, it will become clear that little was actually decided.

That’s not to suggest the matter is going away and that Facebook will be back to business as usual within the next few days. If nothing else, privacy activists have enough fodder to fan the flames for years to come. Facebook knows it has a trust issue to resolve, too. Changes are coming, even if we don’t know exactly what they are. But they likely will come from Facebook long before Congress has time to put meaningful regulation of its own in place.

Assuming Facebook can stick to its own standard after that, Zuckerberg should find himself out of the public’s crosshairs – at least for this reason. Congress doesn’t want to ask any more embarrassing questions either.

Facebook’s users, like shareholders, are winners too (relatively speaking). While advertisers may not be allowed to be quite as intrusive as Cambridge Analytica was, people with active online personas still are giving up massive amounts of data about themselves for advertisers to analyze. That’s why Facebook is, for the time being, still “free.” Even with a much higher privacy bar, Facebook still will know enough about you to deliver accurately targeted ads.

Zuckerberg may be better positioned than ever, in that regard. He has been redeemed in the eyes of Congress and Facebook users, and he didn’t have to give up that much.


Inflation To Rise

Inflation To Rise

March’s prices edged down 0.1% on a big drop in gasoline prices, but this will be reversed in April. Inflation is still headed up this year, to a 2.6% rate (compared with 2017’s 2.1%), reflecting more expensive gasoline and overall higher costs. Gasoline outlays are headed up because of lower inventories of crude oil as demand perks up. The dollar’s lower value will also keep prices of other goods and commodities climbing this year, as many are imported.

Medical-care price inflation will hit 2.8% this year after 1.6% in 2017, which was unusually low. Prices of non-housing services will increase 3.1%, compared with 1.8% last year. New-car leases have become more expensive as car companies adjust to lower-than-expected end-of-lease values. And auto insurance rates are climbing substantially as the industry responds to higher costs for repairing expensive features on newer vehicles.

Not everything will see rising inflation this year. Food prices will continue to bump along at a 1.4% rate. Shelter costs will rise 3.2%, about the same as last year. Apparel prices are retreating from their post-Christmas price surge. Prices of new motor vehicles will be flat, after accounting for quality improvements. Prices of used cars and trucks are softening again, indicating that post-hurricane replacement demand has abated.

The higher inflation rate this year means that the Federal Reserve can stick with its plan of gradual interest rate hikes. The Fed is expected to raise rates a quarter of a percentage point in June and December, and then three to four times next year.


Two New Bubbles Puts U.S. at Risk Says Former Fed Chair

Two New Bubbles Puts U.S. at Risk Says Former Fed Chair

Former Fed Chair Alan Greenspan just warned about these new bubbles in the economy, saying it’s no longer a matter of if, but when the next one will pop. Here’s what you need to know now…

Peter Reagan, April 26, 2018

On January 31, two days before the stock market’s recent sell off, former Fed Chair Alan Greenspan warned:

I think there are two bubbles. We have a stock market bubble and we have a bond market bubble.”

Greenspan believes the ever-increasing government deficit is behind these bubbles, pointing out that the federal debt to GDP ratio is greater now than it was during World War II.

Greenspan also revealed that he doesn’t have confidence in when this situation will be fixed:

“I think we’re getting to the point now where the breakout is going to be on the inflation upside. The only question is when.

Other Experts See it Too

Greenspan isn’t alone in his concerns. William White, former Chief Economist for the Bank for International Settlements, said he believes that we’re in an even more dangerous situation today than we were at the peak of the last bubble. Meanwhile, Peter Schiff says:

“The impending economic collapse is hidden from most. People only see a rising stock market, not the negative underlying factors that will cause the whole system to crash.”

Could a downturn be just around the corner?

How to Hedge Against the Risk

With the stock market seemingly on the brink, and financial experts voicing their concerns, it’s no longer a matter of if, but when the bubble will pop. And when it does, do you want your IRA or 401(k) exposed during the crash?

Don’t leave your hard earned savings exposed. That’s why so many have already moved their savings into something that’s proved, time and time again, to protect against economic uncertainty: physical gold.

While you still can: Get a FREE Info Kit on Gold here. There is zero cost and zero obligation to you – we’ll even pay for shipping.

Plus, this 16-page “insider’s” guide reveals the little-known IRS Tax Law to move your IRA of 401(k) into an IRA backed by physical precious metals – without paying any taxes on the transfer.

It’s an excellent option for anyone who wants to take advantage of this opportunity with any savings in their retirement account.

But remember, you must act soon. Once the bubble pops, it may be too late to take advantage of this opportunity. To get started, click here to get this free info kit on gold.


Millions to be Hit Hard by this U.S. Scheme to Confiscate Your Savings

Millions to be Hit Hard by this U.S. Scheme to Confiscate Your Savings


China Just Launched this Attack on the USD

China Just Launched this Attack on the USD


Move Your IRA or 401k to Gold

The Sneaky IRS Tax Law that’s Sweeping the U.S.

“Better Than Social Security” (Get Info by May 1 Deadline)

“Better Than Social Security” (Get Info by May 1 Deadline)

“It’s Like Getting 4 Social 

Security Checks Every Month”

Dear Reader,


Write this date down … May 1, 2018!


That’s the day thousands of American taxpayers will start collecting huge checks that make the average Social Security payment of $1,342 look like mincemeat.


To be clear, this is not a government program … it’s much better than that. 


For example, Doug Smith  a 46-year-old from Joplin, Missouri  is set to collect $24,075. And Lisa Luhrman, a 57-year-old in Tulsa, Oklahoma is cashing in an even bigger check for $66,570.


And there are many more cashing in now that word is getting out … 


Reuters reported that these checks are “delivering a windfall.” 


Motley Fool said the “cash payouts are sky-high.” 


And Seeking Alpha called them a “hidden gem.”


To find out how you can get these checks, click here (it’s free).


But you must get details by May 1. 


If you don’t sign up by then, your opportunity to see how to collect these massive 4-digit (and even 5-digit) checks will be gone.


Getting started is simple.


All you have to do is watch this video and follow the simple instructions before May 1.


But don’t wait … you must act today before it’s too late.


Just click here now or hit play on the video below


Matt Badiali

Editor, Banyan Hill Publishing






Be Wise With Your Retirement

Be Wise With Your Retirement

Retirement-income strategies are big business. Financial advisers and online advice services will help you transform your savings into a steady retirement paycheck—for a fee. Some mutual funds also promise to deliver a stream of retirement income—for a fee. And all manner of annuities will guarantee you lifetime income—for fees, fees and more fees. But what if the best retirement-income strategy didn’t require you to pay anyone for advice or fancy financial products, and you could actually implement it yourself while channel-surfing and ordering pizza?

Read more

Tax Tips For Late Starters

Tax Tips For Late Starters

If you’ve put off filing your taxes until the last minute, here’s some good news. First, you don’t need to bone up on the new tax law to complete this year’s tax return. For the most part, the Tax Cuts and Jobs Act won’t affect your 2017 taxes.

Read more

Will There Be A Pass-Through Tax Break For Retirement?

Will There Be A Pass-Through Tax Break For Retirement?

Need an extra incentive to ease into retirement with a part-time gig? Or to earn some extra cash to supplement your Social Security and IRA payouts? Would the chance to treat 20% of your freshly found income as tax-free do the trick?

If so, say thank you to the U.S. Congress.

The new tax law creates a special 20% deduction for “pass-through entities,” a category that includes most businesses in the U.S., whether they are organized as a Subchapter S corporation, a limited liability company or a sole proprietorship—that is, simply working for yourself. Basically, you’re a pass-through if you’re not a regular corporation.

That, in fact, was the driving force behind this deduction. The new law slashes the corporate tax rate from 35% to 21%, but it only slices the top personal rate from 39.6% to 37%. Because pass-through income is hit by personal rates, the 20% deduction is an attempt to share the wealth by cutting small-business taxes, too. Shielding 20% of qualifying income from tax effectively cuts the top rate from 37% to 29.6%, which is 10 full percentage points below the old top rate.

So, how big a deal is this? It could be huge.

Cotty Lowry, a highly successful real estate agent in Minneapolis, reports that his accountant thinks he’ll be a “big winner” under the new tax bill. The 20% write-off can apply both to Lowry’s net income from his real estate business and to the rental income thrown off by several buildings he owns. At 71, Lowry, who operates as a Subchapter S corporation, has been thinking of slowing down. But he says the new tax break that lets him keep more of what he earns in commissions, plus the “pure joy of helping my clients,” may encourage him to maintain his current pace a while longer.

How the Pass-Through Deduction Works
The 199A deduction, named after the section of the tax code that authorizes it, applies to “qualified business income.” It’s probably easiest to cite what does not qualify: earnings by an employee, earnings by a regular corporation and earnings from “specified service” businesses that provide service in fields such as health, law, accounting, performing arts and athletics.

You might wonder what’s left, but don’t worry. There’s a gigantic exception. The specified-services poison pill only applies to high-income individuals. If your income is less than $157,500 on an individual return or under $315,000 on a joint return, you can deduct 20% of your qualified business income even if it comes from a specified-service business. The write-off is gradually phased out as income rises above those levels. Because this article addresses side gigs in retirement, we’ll assume you qualify.

The IRS is still figuring this all out, but it’s likely the new deduction will be figured on a special form and then entered on the Form 1040 as a subtraction from adjusted gross income.

What kind of pass-through-income work might make sense for you? Consider phasing into retirement by becoming a consultant for your former employer. Janet Bodnar retired last year from her position as editor of Kiplinger’s Personal Finance magazine. But she didn’t hang up her typewriter. She occasionally writes for the magazine, and as an independent contractor, her earnings qualify for the pass-through tax break.

You don’t have to be a major league landlord like Lowry to get a 20% break on rental income. The IRS hasn’t written regulations yet, but Steve Fishman, author of Every Landlord’s Tax Deduction Guide (Nolo, $40), says he believes that owning a single rental property will rise to the level of a business, opening the door to the new deduction. Get creative. Do you make and sell crafts at local fairs or online websites such as Etsy? Drive for Uber or Lyft? Babysit, run a dog-walking service, tutor children or give music lessons? The new tax law gives you more incentive than ever to develop a new retirement income stream. And if you already have one, you’ll get to keep more of what you earn.