The people at Consensus Advisors look beyond just the quarterly sales figures of retail companies. They have started this thing in which they come up with an annual Retailer Health Rating. This takes into account more financial measures and is spread over a longer time frame. This year, Amazon.com has topped this list followed by Aeropostale, while Walmart takes the fifth spot.
In coming up with this list, they tried to see the actual health and growth potential of a company, and not just the manipulated sales jumps, which quite often happen due to a lot of advertising, or dramatic price cuts. The time period for their study is five years, so start-ups aren’t taken into consideration. They look at four basic criterions: Does the firm have healthy/ steady sales growth, Is the company leveraging its assets properly, How much pricing power does it have or is it avoiding price erosion, and how strong is the balance sheet.
In the athletic category, lululemon athletic, Dick’s Sporting Goods, and Big 5 came on top. In the consumer electronics category, Best Buy and RadioShack emerged the winners. Then in the grocery category, Costco, SuperValu, Gelson’s, Winn-Dixie and Safeway were the top rankers.