BJ's Wholesale Club, Inc., is engaged in the operation of food and general merchandise warehouse clubs. For the 39 weeks ended 10/28/00, net sales increased 17% to $3.43B. Net income rose 21% to $76.7M. Revenues reflect the opening of new stores, increased comparable store sales and an expansion in the number of gas stations in operation. Earnings also benefitted from the effect of leveraging fixed expenses against higher level of sales.

February 27, 2001

Our continuing search for stocks that are showing strong earnings growth coupled with a solid up trend leads us to offer BJ's Wholesale Club, a discount club retailer. BJ's, based primarily in the eastern U.S., has followed the successful model of Costco (Nasdaq:COST) and Sam's Club. When BJ reports its earnings on March 6th (before the market opens) the company is expected to report profits of $0.75, which would be a healthy increase of $0.12 over the same quarter a year ago. The current share price is likely to entice management to announce a split. The last split was announced in February 1999 when the stock was trading at $43.31. BJ has been in a solid uptrend since November and today the stock established another all-time high. If the stock can climb above this new high of $46.80 tomorrow on first hour trading volume over 250,000 shares, momentum traders are encouraged to jump on board for a split and/or earnings anticipation run. A new high would also likely result in a buy signal according to the MACD. OBV and Money Flow are as strong. The 20-DMA provided excellent support during the last pullback. This moving average closed today at $44.06. Keep in mind, this will be a short-term play for us.

Picked on February 27th @ $46.49
Change since picked +0.00
Stop Loss @ $44.00

March 1, 2001

BJ will be a very quick play for us, as the company is slated to report its earnings next Tuesday before the market opens. Consequently, we will exit this position no later than Monday's closing print. We may see a quick rally in anticipation of a split announcement that could come in conjunction with the earnings release. As for today's trading, BJ remains in a decided up trend despite today's mild sell-off. The stock closed above the 10-DMA of $45.44. Those who wish to attempt to catch an earnings and split anticipation run can purchase the stock if it can stay above $45.44 over the next couple of days. A move into new high ground of $47.00, accompanied by midday volume over 400,000 shares tomorrow, could give momentum traders a good entry point. The MACD is curiously negative. However, this may be a non-factor during the very short duration of this play.

Picked on February 27th @ $46.49
Change since picked -1.02
Stop Loss @ $44.00