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Tickers in this Article: TLB, TGT, WMT, KSS, INTC, JDSU
There seems to be a sentiment among many investors that consumers will materially ramp up spending in short order. But with many on Main Street still fearful of losing their jobs and the lack of a vast rebound in real estate, don't expect the average family to become overly liberal with their spending in the near run. With that in mind, the following are retail stocks that have had quite a run over the past year and that look a bit overextended.

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Time To Check Out?
Women's apparel retailer Talbots (NYSE:TLB) has enjoyed a tremendous ride. In fact, its shareholder base must be an extremely happy lot given that the stock has risen from the low single digits a year ago to more than $14 today. But there are several things that should concern investors.

From a big picture standpoint, the job situation in this country is a concern, but so is the prospect for higher interest rates in the near future. Things like this can seriously crimp a person's or a family's spending. Moreover, the women's apparel space is very competitive and frankly, it might be better to stick with discounters that offer clothes in volume and at very low prices.

It's not that the average Talbots shopper is likely to abandon the store for a Target (NYSE:TGT), Wal-Mart (NYSE:WMT) or Kohls (NYSE:KSS). However, there are many fickle consumers out there that aren't particularly loyal and where price will be the major factor in making a purchase decision.

Talbots, much to its credit, exceeded expectations in its fourth quarter. However, next year analysts figure it'll earn only 55 cents. Frankly for a stock that trades in the double digits, that isn't all that impressive. The shares are way overpriced and there is a sizable amount of downside potential from current levels, especially if this market sells off.

No Bargain Either
Like many stock these days, JDS Uniphase (Nadsaq:JDSU) has enjoyed a strong ride. The shares catapulted from the mid-single digits about a year ago to more than $13 today. However, the California-based communications equipment company is expected to earn just $0.35 in its current year. That is certainly better than posting a loss and the bulls will argue that it is expected to grow its EPS number to 50 cents next year. However, plunking down more than 26 times next year's estimate isn't something that I can justify. There are too many things that could change between now and then.

There are lots of other investment opportunities in technology that are appealing. Consider Intel (Nasdaq:INTC), which is an entirely different animal altogether. Long-term, as demand for computers increases, the company's earnings have the potential to soar. Also at around 13.5 times this year's estimate, it's a lot more reasonable.

The Bottom Line
Talbots chances in the near run make me skeptical. There are macro factors that could stymie its upside potential. The shares are overvalued from a price-to-expected-earnings standpoint. JDS Uniphase also looks overpriced based on its price-to-expected-earnings multiple. There appears to be better opportunities in that space. (For more, see Analyst Forecasts Spell Disaster For Some Stocks.)

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