If you liked our pick last month, you’re going to really like this month’s. We’re going with Target (NYSE: TGT) again. “But, Target is trading nearly 12% below the price you paid last month!” you exclaim. That’s exactly WHY we’re recommending it again this month. If it was a good deal last month, it’s a better deal this month. About a week ago Target got clobbered because they missed their EPS forecast (and not by a little) and their sales were down from the same period the year before. Most big investors don’t like that news which resulted in a huge sell-off. Well, we’re not big investors. We’re amateur investors just looking for good companies at great prices to hold for a really long time. Target fits that description. Does missing their EPS forecast change the company in any way? No. Have other great companies ever missed their EPS forecasts? Of course! So, don’t sweat it. A few years from now nobody will even remember this price dip, and we will have enjoyed the long, slow climb back up.

Target’s P/E is still an attractive 12.21 and EPS are 4.28. Not to mention the dividend has increased to nearly 4.3% because of the price drop. If buying Target makes you nervous, wait another month to see what happens. Remember, we’re in this for the long term so a month or two is nothing.

Some ‘experts’ are suggesting Wal-Mart Stores (NYSE: WMT) as a better investment than Target. If it helps you sleep at night, buy them instead. They have a P/E of 16.35 and similar EPS of 4.39 but they are only 5% off their year long high and their dividend yield is only 2.8% (that’s why they aren’t on our radar – our minimum is 3.5%). But are they really a better investment? In January, 2015 they were trading at $90 compared to the current price of $70. That’s a 22% decline. The wouldn’t have been better had you bought then. The price bottomed out around $57 before the stock began to recover. Overall, that’s a 37% decline. Still doesn’t seem better had you endured that gut-wrenching plummet. That would have been a scary time to own a company that some say is a better investment today. But the price did recover, didn’t it? Was there ever any doubt? Of course not! Wal-Mart is a great company. We just don’t think it’s at a good price right now. The point is, every stock has ups and downs. By watching the 52-week highs and lows, we try to buy when the price is good and seems to be recovering. Admittedly, Target hasn’t started to recover yet but we think it will soon enough.