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Highlighted stocks include Carter's, Inc. (CRI - Snapshot Report), Matrix Initiatives Inc. (MTXX), MasTec Inc. (MTZ), DRDGOLD Limited (DROOY) and Dress Barn, Inc. (DBRN).

Carter's, Inc. (CRI - Snapshot Report), the children's clothing retailer, continues to outperform much of the retail sector as the company reported on Feb 24 that fourth quarter sales rose 7.3%.

The company followed through with its prior plans to actually open stores in the fourth quarter, even as retail seemingly struggled, launching 19 Carter’s and 3 OshKosh retail stores, as well as closing one OshKosh retail store. Carter's now operates 253 Carter’s and 165 OshKosh retail stores around the country.

Fourth Quarter 2008 Sales Jumped

Both of the company's brands saw net sales increases in the quarter. Carter's brand rose 9.0% while OshKosh gained 2.2%.

Retail store sales also jumped 12.8% to $213.2 million with Carter's sales growing 16.1% to $130.9 million and OshKosh sales gaining 8% to $82.3 million. Both brands same comparable store sales increased with Carter's rising 4.1% and OshKosh gaining 3.6%.

The company's sales to Wal-Mart and Target also were strong in the quarter. The Child of Mine brand, sold in Wal-Marts, and the Just One Year brand, sold in Target stores, saw sales climb 16.4% to $63.8 million. The Just One Year brand saw the largest sales increase, of 29.3%, due to the launch of new products during the quarter.

Net income fell 4.4% to $27.3 million, or 47 cents per share, from $28.6 million, or 48 cents, in the year ago period. Earnings per share met analysts' estimates.

2009 Consensus Estimates Rise

Covering analysts are bullish on Carter's as 2 out of 5 analysts have raised 2009 estimates in the last 30 days, with 1 raising in just the last week. Consensus estimates are up 2 cents to $1.39 per share in the last 7 days.

Value Fundamentals

When we last reviewed Carter's in Nov 2008 it was a Zacks #1 Rank (strong buy) stock. It is now a Zacks #2 Rank (buy) stock.

Its forward P/E is 12.05 and the price-to-book ratio is 2.39. Carter's has an outstanding 1-year return on equity (ROE) of 20.02%. The company has surprised on estimates 3 out of the last 4 quarters.

Read the Nov 26, 2008 analysis.

Update to Previous Value Zacks Rank Buy Stocks

Matrix Initiatives Inc. (MTXX), the drug manufacturer, is cashing in on over-the-counter cough and cold products as revenue rose 26% in the fiscal third quarter. MTXX has a PEG ratio of only 0.9. Read the Mar 10 analysis.

MasTec Inc. (MTZ), the infrastructure builder, expects to see profit from the economic stimulus plan. The company has surprised the last 4 quarters by an average of 17.06%. MTZ has a PEG ratio of only 0.7. Read the Mar 11 analysis.

DRDGOLD Limited (DROOY), the South African gold miner, is growing its profits as gold remains at multi-decade highs. The stock is cheap, trading at only 4.6x forward earnings. Read the Mar 12 analysis.

Dress Barn, Inc. (DBRN), the women's clothing retailer, recently reaffirmed fiscal 2009 guidance during an extremely tough retail environment. The company has surprised on estimates 3 out of the last 4 quarters. Read the Mar 13 analysis.

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