HART STORES INC. $4.00 (Toronto symbol HIS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 13.6 million; Market cap: $54.4 million; SI Rating: Speculative) operates 76 midsized department stores, mainly in Eastern Canada. Hart prefers to focus on smaller cities that larger department stores tend to avoid. In the past two years, the company has focused most of its expansion efforts on Ontario, where it now has 11 stores. Thanks to three new stores, Hart’s sales in its second fiscal quarter ended August 4, 2007 rose 4.3%, to $41.1 million from $39.4 million a year earlier. Same-store sales grew just 0.1%. Earnings rose 14.3%, to $0.16 a share from $0.14. Long-term debt is just 16% of equity, so Hart has plenty of flexibility to keep expanding. It plans to open five new stores by the spring of 2008. Hart also has $2.8 million ($0.21 a share) in cash. Insiders own about 57% of the shares, which hurts Hart’s liquidity. However, the shares trade at 10.0 times forecast fiscal 2008 profit of $0.40 a share. The $0.10 dividend yields 2.5%. Hart Stores is a buy.
Hart Stores Inc. $4.00 - Toronto symbol HIS
A professional investment analyst for more than 30 years, Pat has developed a stock-selection technique that has proven reliable in both bull and bear markets. His proprietary ValuVesting System™ focuses on stocks that provide exceptional quality at relatively low prices. Many savvy investors and industry leaders consider it the most powerful stock-picking method ever created.