Q: I've been concerned about the future of my shares of TJX Cos. Where do you think they are headed? -- R.Q., via the Internet
A: The retailer of discounted clothing and home fashions has more than 2,400 stores that benefit from its strong ties to such popular brands as Polo Ralph Lauren and Liz Claiborne.
Apparel-makers have fewer outlets to distribute merchandise because of rapid consolidation in the department store field, which benefits the company. Its focus on bargain hunting serves it well when the economy sputters.
Shares of TJX Cos. (TJX) have been about flat this year, following a gain of 23 percent last year and a drop of 8 percent in 2005. The company has a record of increasing dividends and buying back shares.
It operates T.J. Maxx, Marshalls, HomeGoods, A.J. Wright and Bob's Stores in the United States; Winners and HomeSense stores in Canada; and T.K. Maxx stores in Europe. It closed 34 of its former 162 A.J. Wright stores in January.
Despite positive sales trends, there is some question as to how much further its primary T.J. Maxx and Marshalls concepts can grow, and whether other holdings could pick up any slack.
Consensus rating on its stock from Wall Street analysts is "buy," according to Thomson Financial. That consists of eight "strong buys," three "buys," seven "holds" and one "sell."
The company says it does not yet have enough information to fully assess costs associated with a recent credit security breach. Hackers broke into its system that handles credit and debit card transactions, checks and customer merchandise returns.
Customers who shopped at its stores in 2003 and from mid-May through December 2006 could be affected, the company said. A lawsuit charging negligence was filed on behalf of consumers, AmeriFirst Bank sued to recover its cost of replacing credit cards, and other suits are expected.
Earnings are expected to increase 15 percent in its just-started fiscal year, compared with 12 percent forecast for the department-store industry. The five-year annualized return is forecast at 12 percent versus the 14 percent predicted industrywide.
TJX has veteran leadership, with President Carol Meyrowitz, who joined the company in 1983, becoming chief executive in January. Veteran executive Bernard Cammarata continues to serve as chairman, as he has since 1999.
But Alex Smith, a TJX senior executive vice president and group president, recently was hired away by Pier 1 Imports Inc. to become its CEO.
Q: I own shares of Putnam Vista Fund and wonder what has gone wrong lately. -- V.R., via the Internet
A: The departure of respected former co-manager Paul Marrkand for Wellington Management a year and a half ago and its lackluster recent results mean many of its investors are re-examining it.
Co-manager Kevin Divney, who handles the quantitative side, has been on board since mid-2003. He was joined by fundamental research analyst Brian DeChristopher when Marrkand left.
The disciplined fund mixes research from computer models with that of fundamental analysts. It does not make big bets on any industry sector. Two-thirds of assets are in mid-cap stocks; the rest large-cap firms.
The $2.39 billion Putnam Vista Fund "A" (PVISX) is up 3.4 percent over the past 12 months through Feb. 2 to rank in the lowest one-fourth of mid-cap growth funds. Its three-year annualized return of 12.3 percent puts it in the top two-fifths of its peers.
"Putnam Vista has a disciplined process, and fees are reasonable, but it is hard to get enthusiastic because such a key member departed not very long ago," said Reginald Laing, analyst with Morningstar Inc. in Chicago. "But we don't think it is a bad fund, since it is diversified across 100 stocks and doesn't have much stock-specific risk."
Managers screen for companies with attractive earnings growth rates and strong cash flow, following up with fundamental analyst work. They seek stocks with the best combination of growth, value and quality. The number of stocks was reduced in order to better emphasize stock picking.
Health care is its largest concentration, at 17 percent, followed by consumer services, technology hardware and industrial materials. Top holdings recently were Network Appliance, Bear Stearns, UST, L-3 Communications Holdings, Staples, Lam Research, Sierra Health Services, EOG Resources, Apollo Group and C.R. Bard.
This 5.25 percent "load" (sales charge) fund requires a $500 minimum initial investment. Its annual expense ratio is 0.99 percent.
The Putnam fund family, which has undergone significant reform under CEO Ed Haldeman, made a 2004 settlement with regulators tied to improper trading by some portfolio managers. Its own compliance sweep found improper trading by lower-level employees, many of whom were fired.
Q: My husband thinks that once we have contributed enough to our company 401(k) plans to get the full employer match, it is better to invest in a Roth individual retirement account than contribute more to the 401(k)'s. We are in the 28 percent tax bracket. What do you think? -- P.M., via the Internet
A: It does make sense to get the full employer 401(k) match and then contribute anything above that to the Roth IRA.
"The 401(k) money is tax deferred, but the Roth IRA money is tax free, a huge benefit," said Marilyn Capelli Dimitroff, a certified financial planner and president of Capelli Financial Services Inc. in Bloomfield Hills, Mich. "You also don't have to take distributions from a Roth IRA, which means your children could take withdrawals tax free when you pass away."
Another consideration: Income tax rates are at historic lows, she said, so the power of the 401(k) deferral may not be as great if there are higher tax rates in the future.
"But absolutely do get the maximum 401(k) matching from your employer first," she said. "The match varies from employer to employer, but it is amazing that anyone would leave that money on the table."
Andrew Leckey is a Tribune Media Services columnist. E-mail him at email@example.com.