"I've always liked Staples (NASDAQ: SPLS); the company has traditionally put up good numbers, and the stock price has been rewarding for investors over the years," says Chuck Carlson, noting, "Staples is the world's largest office products company. With $27 billion in sales, Staples serves customers in 27 countries."

The editor of the blue chip advisory, The DRIP Investor, adds, "The stock has gotten hammered by a variety of issues." Here's his review. It is down 40% from its 52-week high

"Yes, the environment for retailers is lousy. Yes, it's tough to see any near-term improvement. And, yes, debt is evil right now. But the stock is already discounting to a large degree those negatives. The stock's current price level is attractive enough to warrant some nibbling.

Discount retailer Big Lots Inc. (NYSE: BIG) saw its shares surge higher in Wednesday trading after it posted a fourth-quarter profit from continuing operations that came in ahead of analysts expectations and offered a better-than-expected outlook.

Clearly, investors view BIG as a recession stock to own.

Earnings from continuing operations totaled a dollar per share, ahead of the 93 cents per share analysts were expecting, and 3 cents higher than the year-ago quarter. Revenue fell to $1.37 billion from $1.41 billion last year, but beat expectations of $1.36 billion. Same-store sales fell a mild 3.2%, as sales of discretionary items, such as furniture and toys, were challenging.

In The Cabot Benjamin Graham Value Letter -- which assesses stocks based on Graham's value investing critera, editor J. Royden Ward takes a look at Wal-Mart Stores (NYSE: WMT).

"In this month's Classic Benjamin Graham Value Model, our calculation suggests that the Dow is overvalued at 12,370 and undervalued at 8,305; as such, today the market is extremely undervalued.

"This low-risk environment means it's probably a great time to add risk by dabbling in our recommended stocks such as Wal-Mart Stores.

"How cheap is it? The recent decline in WMT shares has created an outstanding buying opportunity for investors. WMT shares now sell at only 12.3 times forward EPS with a dividend yield of 2.0%.

One of the few companies not participating in yesterday's broad-based rally was retail giant Target Corporation (NYSE: TGT). Target said its fourth-quarter profit fell 41% in the quarter ended Jan. 31, 2009.

The Minneapolis-based company said earnings fell to $609 million, or 81 cents per share, compared to earnings of $1.03 billion, or $1.23 per share, in the year ago period. According to Thomson Reuters, analysts were expecting earnings of 83 cents per share.

Perhaps Wall Street missed the memo "Sell the news." Macy's (NYSE: M), the largest department store company in the country, beat analyst estimates by roughly 5.2% with a fourth quarter adjusted profit of $1.06 per share. Punters sent shares up smartly on the news, over 4%.

That same morning, we got the worst CCI numbers on record -- below the 30-point range. The Piqqem Sentiment on Macy's has flat-lined after some uptick, implying today's swing could be a dead-cat bounce.

The saga of Target (NYSE: TGT) has been a fascinating one for retail watchers. Once considered the only peer to Wal-Mart (NYSE: WMT) in mass market merchandising, Target magically levitated above the hoi polloi in blue smocks by selling cheap stuff that somehow managed to be cool. Shares have been on a wild ride, although Piqqem Sentiment for the company is positive valuing shares well above the current $30 zone.

"Microsoft (NASDAQ: MSFT), having watched Apple's success at running its own stores, has decided to get into retailing as well," reports Bill Martin in his BullMarket.com advisory.

"Microsoft began its new retail effort by announcing last night that it had hired a veteran retail executive to lead it. The software giant hired David Porter away from DreamWorks Animation SKG, where he was head of worldwide product distribution.

"Prior to joining DreamWorks in 2007, Porter had spent 25 years at Wal-Mart, where he held a variety of jobs in store operations, merchandising, and information technology.

On a day when stocks were down more than 3%, Wal-Mart (NYSE: WMT) moved to the upside yesterday by more than 4%. The reason for the big gain was the company's fourth-quarter operating performance.

The company reported that it had earned $1.03 per share, excluding items. This compares favorably to analyst expectations of 99 cents per share. In the year prior, WMT made $1.02 per share.

The company said it is seeing customer traffic increase as it draws sales away from competitors. The intense focus on price savings is paying dividends during this economic slowdown.

WMT said earnings were hurt by a strong U.S. dollar that weakened the impact of overseas sales. Looking forward, WMT expects the global slowdown to negatively impact performance and that a strong dollar would hurt earnings over the next few quarters.

Back in November I wrote about JCPenney's (NYSE: JCP) plans to move upscale in a down-market, hoping to attract trade-down consumers who can no longer afford Neiman Marcus or even Macy's (NYSE: M).

In a way it seems counter-intuitive: selling more expensive merchandise in an economy where everyone is looking to go cheaper. But JC Penney's management decided that it would have a better chance at surviving this market by offering affordable luxury, and its new ad campaign reflects that.

The Wall Street Journal reports (subscription required) that the company's spring advertising campaigns "will focus only on its most fashion-forward clothing lines."

"Last spring, CEO Leonard Riggio of Barnes & Noble (NYSE: BKS) purchased almost $50 million-worth of his company's stock between $27-29.50; today, it languishes on the remainder table at $17.56," says Mark Skousen.

In his income-oriented speciality service, High Income Alert, the advisor says, "Now, a billionaire has also taken a stake." Here's the advisor's update.

"Barnes & Noble is a worthy addition to our model portfolio. Trading well below the level that the CEO purchased shares, we consider the stock a bargain.

"Barnes & Noble owns the nation's largest chain of bookstores, with 800 stores in 50 states. It also owns one of the Web's most-visited Web sites, bn.com. Between its stores and Web site, Barnes and Noble sells more than 300 million books a year.

It doesn't take a genius to project that earnings reports will reflect slow retail sales activity in the last quarter of 2008.

In fact, reports in the last few days have, for the most part, reflected lower results than had been projected by the companies and the analysts following them.

The first read of the third-quarter results for Supervalu (NYSE: SVU) appeared to confirm that the company was performing consistent with the trends. SVU reported a loss of $13.95 per share, mostly resulting from a $3.3 billion charge for the writedown of goodwill and other intangible assets.

The reality is, however, that Supervalu is performing better than many of their competitors, such as Wal-Mart (NYSE: WMT), which reported sales and earnings well below expectations.

In its report to investors, SVU lowered its guidance for the full fiscal 2009 year to reflect the impact of higher commodity prices and cautious consumer spending.

It comes as no surprise that the top performer among the stocks comprising the S&P 500 Index is a retailer focused on delivering quality products and services at a discount price.

Family Dollar Stores (NYSE: FDO) increased nearly 30% in 2008, compared with a decrease of 40% in the S&P 500.

Defying the expectations of gloomy analysts who are paralyzed by their inability to value companies during the last 12 months, and by short sellers who perceived a price drop following the high level performance in 2008, the stock is continuing its climb as we enter the 2009 trading year.

Family Dollar reported first quarter earnings Wednesday, which exceeded analysts' expectations and company projections.

Earnings for the period were up by 14%, with revenue increasing by 4.2% and same-store sales up a healthy 2.1%. Market reaction to the report is stunning, with FDO up more than 14% at the close.

Family Dollar CEO Howard Levine, son of founder and Chairman Emeritus Leon Levine, issued a forecast of continued growth for the next quarter and for all of 2009.

The company is now projecting earnings of $1.63 to $1.81 per share for fiscal year 2009. Earlier forecasts were in the range of $1.58 to $1.78. Projections of same-store sales growth for the year were also increased from a range of 1%-3% to 2%-4%.

FDO combines conservative leadership with a consumer-friendly neighborhood store environment, and a product mix appealing to cost-conscious consumers to deliver value and a positive shopping experience. With minimal exposure to price-volatile electronic and apparel inventory, company performance is not likely to be adversely affected by a prolonged economic downturn.

FDO has more than 6,000 locations in 44 contiguous states. The company has effectively managed its rapid growth during the last five years, having opened more than half of its stores during this period.

One stock that I think has traded irrationally is Deckers Outdoor Corp. (NASDAQ: DECK).

Shares of the UGG and Teva footwear company had fallen to $80 per share in late October, but lost nearly 50% of its value from there in November.

Considering that the company increased guidance on Oct. 23, this move made little sense.

When I last wrote about DECK in July, shares were trading for more than $100, but well off their highs above $160. At that time, I suggested that investors resist the urge to buy the beaten-down stock, no matter how tempting.

It wasn't that I didn't believe in the potential of the company. Instead, the macro picture being as it was at that time suggested waiting for a better entry point. I thought below $80 would make sense.

I was right about waiting, although I did not think the stock would sink to less than $50 as it did in late November. Obviously something was amiss given that DECK's performance was quite stellar.

Back in late September, I suggested that investors should wait before investing in specialty retailer Williams-Sonoma Inc. (NYSE: WSM).

I argued then that the price tag for purchasing the company's goods was too high for most consumers in the current environment, as the days of easy money were over.

No more endless dollars from rising home values funding unlimited purchase of goods like furniture, beds and kitchen gadgets of the sort sold by WSM. This was evidenced by continuing declining earnings and same-store sales at the company.

In addition, I noted that Williams-Sonoma had any number of formidable competitors, which could put a strain on its profit margins. There will be a time to own this stock, I wrote, but that time hasn't arrived yet. I foresaw another 20% decline in the shares.

As it turned out, there was a lot more than 20% more downside to the stock -- more like 75% before the stock finally found a bottom as Thanksgiving approached. A brief rally ensued, but a miserable Black Friday sent most shares in the retail sector quickly south again.

I grew up in the 1970s and recall fondly watching the TV series "Dallas" with my family on Friday nights. Everything on the culturally sensational show was big, including its storylines.

Of course, one of my favorites was "who shot J.R.?" But another favorite was the return of Bobby Ewing after a supposed death that was resolved by stating the entire season was a dream.

I like to use the dream analogy for stocks that have made a round trip journey in a short period of time. If a stock goes up only to return to the level previously, it is as if the investor woke from a dream and the stock never actually moved up.

Such is the story of closeout retailer Big Lots (NYSE: BIG).

Shares started the year around $15 per share. Enthusiasm over profits and performance as consumers in a struggling economy sought lower-priced options fueled a gain in BIG.

Shares more than doubled in value, but hit a roadblock in late August. At that time, earnings that beat estimates were not enough to keep the momentum going. I wrote about the company at that time and suggested that investors in BIG should take money off the table.