Junior Retailers for Aggressive Buyers

Article Excerpt

HART STORES INC. $4.25 (Toronto symbol HIS; SI Rating: Speculative) operates 71 mid-sized department stores, mainly in Quebec and Eastern Canada. In the past year, Hart has opened eight new stores, including its five in Ontario. It prefers to focus on smaller urban centres that larger chains tend to avoid. Thanks to this expansion, Hart’s revenue in the nine months ended October 29, 2005 increased 10.5%, to $100.9 million from $91.3 million a year earlier, mostly due to strong sales of apparel and home furnishings. However, same-store sales fell 1.3%. Income rose 42.1%, to $0.27 a share from $0.19. The company is currently building a new distribution centre and head office complex near Montreal. Hart did not say how much this project would cost, but the facility should expand capacity and cut distribution costs. The stock recently got as high as $4.50, but still trades at just 8.9 times the $0.48 a share it should earn in the current fiscal year. The $0.08 dividend…

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