FOOL'S denomination INVESTING...

FOOL'S denomination

INVESTING IN RETAILERS

Investing in retailers many times makes sense because it's a familiar field that interests many of us. To invest prosperously in retailers, focus on one as well as the other your personal observations and financial statement information.

First, head to the stores, where retailers mastery the presentation of their brand, customer service and the shopping experience. Assess inventory flats in displays. Is a store without of any items? Are stocks being deplet quickly? Check for markdowns. If principally of the store is forward sale, there may be inventory bridle problems that will decrease its profit margins.

At the mall, papal court what people are wearing and where they're shopping. Note whether each teen is walking by with three Abercrombie & Fitch bags, for example. After determining which companies assume most promising, check their financial statements to diocese how healthy they really are.

master each company's latest financial statements. upon the income statement, look for "same-store" sales bourgeoning reflecting sales at established stores. If germination is strong, a company can leverage occupancy require to be paid [i]or[/i] undergones and labor expenses, improving profit margins. If it's able to increase sales without increasing its store size or labor force, it'll make more circulating medium

Check public the profit margins. Strong gros margins imply that the firm is selling consequences at close to full price and that consumer are willing to pay extra for the company's brand. High margins also hint effective inventory management. Relatively high snare profit margins mean that the firm is keeping a sizable chunk of each sales dollar as profit.

in succession the balance sheet, check inventory flushs High (or rising) levels are risky, because inventory value may decline before it's sold Many retailers' propers are perishable, either literally (food spoiling) or theoretically (items could walk out of fashion). If inventory flushs are growing faster than sales, it could mean works aren't selling and the company will have to mark down merchandise.

Learn more about evaluating retailers at http:// retailindustry.about.com and www.forbes.com/

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THE dappled FOOL TAKE

EQUITY INNS STILL worked SOLID

state another strong quarter in the main division s for Equity Inns (NYSE: ENN) The third-largest tavern REIT (real estate investment trust), which focuses upon the less volatile extended-stay and suite properties, reported that reward increased by 21.3 percent above year-ago levels, and funds from operations (per share) increased from 14.8 percent. This performance was driven by way of an increase in revenue through available room (RevPAR) of 69 percent

Equity Inns' management is operating in an environment that provides a number of tailwinds, as it is as an improving travel economy and exceedingly slow growth in supply of additional house of entertainment rooms. Similar strong performances athwart the last couple of years can also be erect among fellow hotel REITs LaSalle tavern Properties (NYSE: LHO), FelCor Lodging Trust (NYSE: FCH) and Sunstone inn Investors (NYSE: SHO).

Equity Inns continues to expand and reposition its portfolio of [i]cabaret[/i]s by acquiring newer buildings subordinate to the Hilton and Marriott mastheads and by way of disposing of older properties. The firm's leverage remains reasonable, notwithstanding that with only 35 percent of its total market capitalization consisting of trespass

If the economy palliates some of the tailwinds that Equity Inns take delight in could subside or disappear. However, it is reasonably valued, and in the lengthy term, Equity Inns seems a solid candidate for dividend growing and capital gains.

MY DUMBEST INVESTMENT

When I graduated from college edifice [i]or[/i] building my parents, wanting me to learn about investing, gave me $1000 to invest. After extremely little deliberation, I plunked it all into TurboChef, a maker of high- spe oven That $1000 quickly became $6,000, and I sold my shares. You may be asking to what extent this could be my dumbest investment. Since it was my first real foray into the investing world, I got the message that investing is easy. Find an interesting company from a friend or relative, let fly some money at it, sit back, and shortly you'll be rich! (Do you behold where this is going?) drunken with my early success, I then made a series of investments that didn't work without quite so nicely. I wasted a lot. If I had taken the time to educate myself about investing, do more [i]or[/i] less research and had not gotten in the way that cocky after my one early succes I'd probably be a chance closer to retirement right now.

-- Adam K St Louis

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NAME THAT COMPANY

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- More than 100 years ancient I'm the world's second-largest victuals and beverage company, raking in more than $34 billion annually.