Pier 1 and Ross Stores to Open Near 52-Week Highs

While the markets were down overall yesterday, retailers Pier 1 Imports (NYSE:

) and Ross Stores (NASDAQ:

) reached new multiyear highs of $12.99 and $89.25 per share, respectively.

Pier 1

's share price jumped after the company said in October that it would repurchase up to $100 million in shares. Pier 1 was also a Jim Cramer pick following its solid second-quarter results. The Fort Worth, Tex.-based retailer offers decorative home furnishings and gifts. It has more than 1,000 stores in the U.S., Canada and Mexico. Founded in 1970, Pier 1 now has a market cap of $1.4 billion. The price-to-earnings ratio is lower than the industry average, and the operating margin is higher than the industry average. The long-term EPS growth forecast is 12.5% and the return on equity is 30.3%. Six of 8 analysts consider it a Buy or Strong Buy; none rate it a Sell. The share price is more than 27% higher than a month ago. The stock has outperformed competitors Cost Plus (NASDAQ:

CPWM

) and Williams-Sonoma (NYSE:

WSM

) over the past six months.

Ross Stores

announced that it would expand with 15 new stores in Arkansas and Illinois. Jim Cramer recently has called this stock a Buy as well, and there have been takeover rumors about the company. The Pleasanton, Calif.-based company operates more than 1,000 off-price retail apparel and home accessories stores in the United States. Its market cap is $10.1 billion. It was founded in 1957. Earnings per share are anticipated to grow 11.3% over the next five years and the return on equity is 45.1%. Its operating margin is higher than the industry average and it has a dividend yield of 1.0%. The PEG ratio is 1.2. The share price is up more than 11% in the past month, as well as about 49% higher than a year ago. The stock has outperformed competitors TJX Companies (NYSE:

TJX

) and Walmart (NYSE:

WMT

) over the past six months.

Action Items: Bullish:

Traders interested in retail exchange traded funds might want to consider the following trades:

SPDR S&P Retail (NYSE: XRT) is up more than 9% year to date.
Consumer Discretionary Select Sector SPDR (NYSE: XLY) is up more than 5% year to date.
Vanguard Consumer Discretionary ETF (NYSE: VCR) is up more than 4% year to date.

Bearish:

Or traders might want to consider this alternative position:

ProShares UltraShort Consumer Services (NYSE: SCC), though it is currently trading just above the 52-week low.

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ROSTRoss Stores Inc

$184.63-0.94%

Overview

SCCProShares UltraShort Consumer Discretionary

$14.131.14%

TJXTJX Companies Inc

$157.00-0.76%

VCRVanguard Consumer Discretion ETF

$401.02-%

WMTWalmart Inc

$115.52-1.09%

WSMWilliams-Sonoma Inc