Quick Take: Link: Be Picky With Retail Stocks

Tickers in this article: COH COST JWN KSS M TJX WMT
NEW YORK (TheStreet) -- The retail sector has been disappointing to many investors, although there are still some names to favor on the long side.

Stephanie Link, co-manager of the Action Alerts PLUS portfolio, told TheStreet's Lindsey Bell that investors don't know where to turn after disappointing results from Macy's earlier in the week, followed by similar results from Wal-Mart and Kohl's .

Link suggested investors focus on companies that have one or more of these qualities: recurring revenue streams, strong balance sheets, ability to expand and grow and a focus on restructuring.

Consumers, particularly in the middle and upper classes, seem to be spending on home goods rather than apparel. This is one reason why the AAP portfolio invests in Costco Wholesale , as well as for its recurring revenue stream and strong comp numbers.

Under $50 per share, TJX Companies is also on her radar. The company boasts square footage growth, exposure to home goods and international and domestic opportunities with its Marmaxx brand.

She added that in the low-$50 range she likes Coach for its pending restructuring efforts and Nordstrom in the low- to mid-$50 range.

-- Written by Bret Kenwell in Petoskey, Mich.