Despite a weak economy this year, American consumers have been surprisingly loath to put away their wallets and purses.
If the economy doesn't slip into a double-dip recession, it is these spendthrift consumers who deserve much credit. Spending could hardly have been described as robust, but the MARTS Retail Sales index has been in positive territory month-to-month for most of the year.
The two big winners have been electronics retailers and discount stores. Two of the latter - BJ's Wholesale Club and Costco - are on our list, but two other standouts have nothing to do with discounting.
The first is Chico's, a women's apparel retailer. Chico's loyal customers, big growth prospects and flawless balance sheet make this a great company in our eyes. It also trades at a nice discount to our fair value estimate.
We're cheating a little by calling CDW Computers a retailer - it only has two retail locations and is mainly a technology reseller - but we can't help ourselves. This is another great growth story with no debt on its books and will be among the first to benefit when technology spending rebounds. The firm has done a nice job of holding its own through the current spending downturn, signaling to us that it's grabbing market share from competitors.