Target is known for competitive prices but trader Josh Brown says the stock is pretty cheap too.
First he likes the fundamentals and the way management runs the business.
“Target has beaten earnings expectations for 12 consecutive quarters,” he says.
"Also they just completed a $5 billion buyback and at the shareholders meeting this week I think we could see more buybacks or a dividend hike.”
According to Brown, the company’s stated intention is to go to $3 in dividends by 2017 – right now it’s around $1.20.
However, there’s another catalyst – a technical tell that Brown is really excited about.
He thinks the stock is about to break out and likes the risk reward
“I think $55 is major support and I don’t think a run to $70 is out of the question,” he says. "Right here is perfect."