For Discriminating Retail Investors

It has been a fairly dismal second quarter for apparel retailers. For every Gap (GPS) that reports earnings that provide investors with encouragement, there is a Macy's (M) that reports disappointing results and guidance. The teen retailing space is a disaster, judging from the results from American Eagle (AEO), Aeropostale (ARO) and Abercrombie & Fitch (ANF).

I am underweight the sector as retail sales are growing at about 2%, year-over-year, right now and retail traffic in U.S. stores has declined for eight of the last 10 weeks, according to ShopperTrak. With the overall retailing sector having run up some 25% over the last year, the area looks somewhat overbought to me. However, some apparel retailers are bucking the trend by reporting results that are beating expectations. Here are two retailers that have reported positive results and look attractive -- especially if we see another dip in the market....346 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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