Brenda Vingiello, CIO, Sand Hill Global Advisors TJX Companies TJX-N BUY Mar 15, 2024

He added more. The consumer is trading down (see Kellogg's and Starbucks earnings). There's growth here again, and have been increasing their modest dividend. Boast $4 billion in free cash flow the past year.

(A Top Pick May 12/23, Up 24%)

Discount clothing business that is performing well. Owns companies like Winners and HomeSense. Higher interest rates pushing consumers to lower priced shopping centers. Has sold shares (believes is fully valued). 

He bought more today as it made a new high today. If the consumer is weakening, TJX will benefit. This stock has seen a holding pattern in terms of margins, post-Covid, but they are no increasing margins, earnings and dividends. They can do well in a good as well as bad economy.

They report next Wednesday, an important day. The street expects comp sales at 2.7%. Q2 saw a lot of gifting events--Mother's and Father's Days. He expects a strong report.

The US consumer remains a risk despite Target's strong performance today and their quarter. The lower-end consumer is challenged by inflation and are looking for discount sellers like TJX. Their margin guidance is 31%, which is phenomenal for retail. Target's number is encouraging though. He will look at them. TJX beat earnings and raised guidance.

Earnings beat and an excellent report, but guidance was conservative, and he expects TJX will beat it. They're in the sweet spot as off-price consumer goods are doing well. TJX has replaced Target in retail in consumer discretionary.

He sold a March covered all, $125 strike, expiring March 14. He loved their blow out quarter with 5% same store sales growth and raised the dividend by 13%.

Will survive this tariff war, TJX will thrive with excess inventory from suppliers.

Loves it. Will do well in a recession. Consumers are loyal.