United Stationers (Nasdaq:USTR), Office Depot (NYSE:ODP), Home Depot (NYSE:HD) Top Retail Picks of FBR

FBR liked what they saw in general for hardline retailers in December, and released a report on a number of companies, of which their favorites are United Stationers (Nasdaq:USTR), Office Depot (NYSE:ODP) and Home Depot (NYSE:HD), all which they have an "Outperform" on.

FBR says, "Retail sales as reported by the census for hardlines (these companies do not report monthly comp store sales), were generally good for the categories we track in December, with all categories but one showing a sequential improvement in YOY trends. Most notable was Home Improvement (building materials, garden equipment and supplies dealers, NAICS 444) which was up +13.1% YOY. This was an acceleration from the +11.2% reported in October, and an improvement on a 3-year stacked basis. Consumer Electronics Sales (NAICS 443) improved to +1.8% YOY for the month of December, up from -0.4% in November. Based on the recent results and comments out of BBY & HGG (both included the month of December), as well as HD, the strength within this category was likely driven by appliances. Aftermarket Auto Parts were up +9.6% YOY, and this was up from +9.3% in November. So, the strength in after-market auto parts continues its pace. Home Furnishings were flat sequentially, at +1.4% YOY for the month of December. Strength in this category continues to be on the furniture side. Office Supplies (NAICS 4532) sales are reported on a one month lag, and these were up +7.7% in the month of November, up from -1.7% in October. While this category showed notable strength, it contradicts our channel checks, which have shown a slight deceleration in the month of November.

Those getting a "Market Perform" from FBR included Lowe's (NYSE:LOW), RadioShack (NYSE:RSH), Best Buy (NYSE:BBY), hhgregg (NYSE:HGG), OfficeMax (NYSE:OMX), AutoZone (NYSE:AZO), Advanced Auto (NYSE:AAP), and O'reilly (Nasdaq:ORLY).

Companies with an "Underperform" rating were Staples (Nasdaq:SPLS), Genuine Parts (NYSE:GPC), Tractor Supply (Nasdaq:TSCO), and Bed Bath & Beyond (Nasdaq:BBBY).

United Stationers (NASDAQ:USTR) EPS Estimates Adjusted by FBR

FBR Capital adjusted their EPS estimates on United Stationers (NASDAQ:USTR), lowering them in the shorter term but strengthening them in their longer outlook.

FBR said, "We adjust our 4Q10 EPS estimate to $1.04 from $1.05, and this compares with the Street consensus estimate of $1.07. Our 2010E EPS estimate of $4.24 compares with the Street estimate of $4.26. For 2011E, we adjust our EPS estimate to $5.18, which is above the Street consensus estimate of $5.03. We adjust our 2012E EPS estimate to $5.75 from $5.65, and this compares with the mean estimate of $5.59."

FBR Capital maintains an "Outperform/Top Pick" rating on United Stationers (NASDAQ:USTR), which was trading at $64.49, down $0.32, or 0.49 percent, as of 2:42 PM EST. They raised their price target on them from $66 to $70.