The retail names that have performed well look to do well through year-end, Deutsche Bank analyst Charles Grom said Tuesday on CNBC.
“I think through the end of the year, you want to stick with the winners,” he said on “Fast Money.” “I think that’s been the trade that’s worked for most of the year and for us.”
Grom looked to “a balanced barbell approach” to stocks.
“We’ll own names like Costco and Target on the defensive side of that barbell, and we’ll own a Macy’s and Nordstrom on the other end,” he said.
Asked about a possible takeover target, Grom named Big Lots.
“The stock has massively underperformed. It’s very cheap,” he said. “It’s a model that probably needs to get fixed.”
Among his other top picks were Dollar Tree and Whole Foods.
“There’s definitely a paradigm shift going on out there toward healthy eating,” he said.
On the other end of the spectrum, names to avoid include JCPenney “in the mid-20s.”
“We’d also avoid some of the traditional grocers that we think have big secular challenges, such as a Safeway or Supervalu ,” he said.
Trader disclosure: On Oct. 16, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long CSCO; Tim Seymour is long YHOO; Tim Seymour is long SBUX; Tim Seymour is long VALE; Dan Nathan is long AAPL OCT 700 CALLS; Dan Nathan is long C NOV 36/34 PUT SPREAD; Dan Nathan is long GS OCT/NOV 115 PUT CALENDAR; Dan Nathan is long JPM OCT/NOV 41 PUT CALENDAR; Dan Nathan is long MS JAN 10/5 PUT SPREAD; Dan Nathan is long YHOO JAN 17.5 CALLS; Dan Nathan is long FB NOV/JAN 22 CALL SPREAD; Dan Nathan is long WFM 95/85/75 PUT FLY; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long SBUX; Joe Terranova is long NFLX; Joe Terranova is long SWN; Joe Terranova is long TRV; Joe Terranova is long VZ; Joe Terranova is long XOM; Joe Terranova is long CVX; Joe Terranova is long COP; Joe Terranova is long SU; Joe Terranova is long CSTR; Joe Terranova is long NXPI; Joe Terranova is long EMC; Joe Terranova is long GS; Joe Terranova is long CHKP; Joe Terranova is long SNDK; Joe Terranova is long GLW; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long F; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MPC; Steve Grasso is long P; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN;
For Charles Grom
COSTCO: Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from Costco Wholesale Corporation within the past year; DOLLAR GENERAL: Dollar General Corp is an Investment Banking client of Deutsche Bank Securities; GNC: GNC Holdings, Inc. is an Investment Banking client of Deutsche Bank Securities; JCP: JC Penney Company Inc is an Investment Banking client of Deutsche Bank Securities; Deutsche Bank and/or its affiliates own 1% or more of JC Penney Company common equity securities; SAFEWAY: Deutsche Bank (and/or affiliates) own 1% or more of Safeway Inc common equity securities; Safeway Inc is an Investment Banking client of Deutsche Bank Securities; Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from Safeway Inc; Safeway Inc has been a client of Deutsche Bank Securities Inc. within the past year, during which time it received non-investment banking securities-related services; SUPERVALU: Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from Supervalu Inc; TARGET: Target Corporation is an Investment Banking client of Deutsche Bank Securities; Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from Target Corporation within the past year; Target Corporation has been a client of Deutsche Bank Securities Inc. within the past year, during which time it received non-investment banking securities-related services.
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