Seasonal hiring will be spotty

Craig Johnson, the Chair of our Consumer Community, believes that seasonal hiring among retailers will be down overall but healthier in a few segments.

He believes the stores that will do the best, and those that will hire more seasonal workers, will be some of the discount players like T.J. Maxx, Ross, Aeropostale and Kohl's. Also adding payroll will be Toys R Us, which is installing seasonal stores in storefronts recently vacated due to the recession.

Craig believes that retailers across all segments will not hire as many workers as they have in the past. He sees retailers finding new ways that their current staff can be more productive. The most obvious method will be for management to increase their staff's hours. Current part-time workers are expected to see the biggest increases.

Retail Review

Today we have a roundtable with some great thoughtleaders in retail. Travelling the last few days with Chris Lee former SR VP with Forever 21 its apparent the trade down in retail is going to be a prevalent issue this Christmas. Chris likes TJ Maxx and other brand players that compete at the lower end like Forever 21 . But its not just loyalty he cites the fact that some stores he thinks are looking at reallocating space as the consumer shows any move up in buying and also looks for foreign players to come in and take advantage of the dollar and cheap real estate to acquire properties , possibly in bulk and in partnership with big retailers rather than the REITS. Look at Sears, Walmart, or even a Macy's to take space and create some kind of store within a store concept.

BLC is still a Buy

Our presenter still likes Belo Corp (NYSE: BLC, $5.39), despite an impressive move from $2.02, where the name was recommended back in June. He is adding to his holding. The stock was beaten down on concerns the company may not survive, but investors are feeling more comfortable about Belo's ability to service its debt. The key catalysts for Belo will be mid-term elections next year, Winter Olympics, and a pickup in auto advertising, which contributes 25% of local ad spend. Easier comps should also help. The presenter believes the stock might have another $4-5 of upside left

Black Rock's ETFs

Black Rock's acquisition of IShares has implications for the investment management industry. With this purchase, BLK's AUM mix shifts to about 50/50 active/passive. Given that trading is a diseconomy of scale in the investment management business, this mix allows BLK's growth to continue with a smaller impact from this impediment. Cynically, it might be argued that as a firm grows, there's a risk its results become more average, and that passive management will earn better returns for the firm and its clients. But I won't make that argument. BLK clearly expects that ETFs will be used more broadly in the implementation of investment strategies. I was involved in the design of the first ETF at State Street two decades ago. At the time we thought ETFs were an improvement on many aspects of mutual funds. We also thought the wrap account business would offer benefits to retail investors. Finally, the ETF business has developed enough diversity and complexity where there is probably room for an expansion management activity far beyond strategic asset allocation. IShares has been pushing on the 401(k) market, but there is really little penetration of the large end of the market by ETFs. There has always been this fear that too much passive management will affect the price discovery mechanism for stocks. For any given stock, active managers over time should be the marginal pricers, but as more of the stock is tied up in passive portfolios one would expect more market impact from the trading of a position of a given size. This might cause more valuation discrepancies for active managers to take advantage of. Finally, this acquisition may have an effect on the AUM mix of Merrill brokers, with BLK's ETFs possibly gaining share at the expense of other players.

Knight Capital Grabbing Share from Rivals

Knight Capital Group (NITE: Nasdaq) is another small cap name from our recent idea forum. The company has seen its trading volumes jump dramatically in recent months and with retail coming back to market the prospects look bright. NITE offers the best trade execution at the lowest available price. The firm has gained share and is now moving into Europe and Asia. The presenter thinks the stock can move to high $20's from $21 currently, based on earnings and comparison to peers.

Boston Idea Forum

Talbots was brought up today as a company in transition that if they simply finish closing what they can and execute some of their other initiatives could be returing near historic margins. Outlet store concept could help make up lost revenues and within two years have an impact as store base expected to get to near 100 stores.

LabCorp a Good Value at $66

Our Dallas presenter highlights LabCorp's (NYSE:LH) excellent cash flow characteristics and steady if unspectacular growth in top-line. The company's nationwide lab network gives it a clear scale advantage compared to small regional players. As the move to preventative care and personalized medicine gathers pace, LH is very well-positioned to grow its operations. Specialized testing, where prices are a level above regular diagnostics, already comprises over a third of the company's total value and that ratio is poised to increase going forward. Margins are impressive, but recently implemented automation initiatives will further boost LabCorp's bottom line. The presenter's target range is $85-$90, based on historical EBITDA multiples.