The TJX Companies (NYSE: TJX) is a leading off-price retailer of apparel and home fashions in North America and Europe. The firm sells family apparel, accessories, shoes, giftware, jewelry and home furnishings through nearly 2,100 stores in the United States (T.J. Maxx, Marshalls, HomeGoods, A.J. Wright, Bob's Stores), over 250 outlets in Canada (Winners, HomeSense), and 226 T.K. Maxx stores in the United Kingdom and Ireland. Target (NYSE: TGT), Kohl's (NYSE: KSS) and Ross Stores (NASDAQ: ROST) are major competitors.

The company pleased investors last week, when it reported a December same-store sales increase of three percent (y/y) and issued upside guidance for the fourth quarter. Management now sees Q4 EPS of 60-63 cents, versus previous guidance of 58-60 cents and Street consensus of 59 cents. The CEO attributed success to disciplined inventory management and expense control. Analysts also pointed to the tendency of consumers to move to discount-oriented chains in a declining economy.

The stock popped into a bullish "pennant" consolidation pattern on the news. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, the price appears to be in the process of executing that breakout.

Brokers recommend the issue with six "strong buys", four "buys" and eight "holds". The stock's Price to Sales ratio (0.69), Price to Free Cash Flow ratio (18.95), EPS Growth rate (12.50%), Return on Investment (19.34%) and Return on Equity (33.08%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $25.49 and $32.46. A stop-loss of $24.85 looks good here. Note that the firm is expected to report Q4 results in late February.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.