Target (NYSE: TGT)has taken a beating since the whole credit card hacking debacle in late 2013. They went from a high of $73.50 to under $55.00 – a drop of over 25% in just a few months. Yes, Target was responsible for the hacking and yes, they may take quite a hit from consumers for it. But being punished to the tune of 25% was a bit of an overreaction. The company is still strong and should recover. Any liability should be minimal. Target responded properly and took responsibility so I think this will blow over.
Target has a strong balance sheet, a strong history of paying dividends, and has a good image with consumers. At current prices, the yield is about 2.85%. Even if Target comes back halfway to its 52 week high, it’s still a gain of over 16%. There’s no reason it can’t get there and perhaps even more. I believe in it so much, I took a position in it in late January and it now makes up 9% of my personal portfolio. This is a pure value play for me – I think it’s just dirt cheap and took a much bigger beating than it deserved. If you’re waiting for a decent retail stock, Target might just be the right opportunity.