Shoppers headed back to the malls on the day after Christmas in what's shaping up as a second Black Friday for retailers. So which retail stocks look the most promising — in the midst of a particularly unpromising holiday shopping season?
"Equity analysts have to become credit analysts," Telsey Research Group's chief research officer Dana Telsey told CNBC. "The balance sheet has become so much more important."
"The stocks are at bargain prices," she said. "Valuations — in the old days, 20 times was the high P/E multiple on forward earnings; 13 was the low; now, 13 is the high and six is the low."
So whom is Telsey recommending?
"The discounters are going to continue to win," she said. "The Walmarts , the Dollar Trees of the world; on the specialty-store side, it's still Deckers that's doing the best."
Where does she see improvement?
The children's-wear retailers like Children's Place , they're the ones that are gaining steam, because they'll gain some operating margin improvement," she said.
Disclosure information for Dana Telsey was not immediately available.