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4 Retail Stocks That Added 10% or More in a Month Despite Odds

Sumit Singh

After a tumultuous May owing to escalated trade tensions between the United States and China and fears of an economic slowdown, the stock market seems to be taking a breather. This may be in part due to rising hopes for easing of monetary policies. Again, possible talks between Presidents Donald Trump and Xi Jinping at the G-20 summit are allaying fears.

For now, the investment climate may not seem favorable for risk-averse investors. While they are clamoring for a rate cut, they may also prefer playing safe on hopes that the U.S.-China trade tiff will be settled amicably. Nonetheless, ignoring the market jitters and speculations, a few stocks have managed to score 10% or more in a month. Here we have highlighted four such stocks from the Zacks Retail-Wholesale sector.

Why the Retail Sector?

Retail-Wholesale sector, which occupies top 32% position in the list of Zacks sectors (five out of 16), has advanced roughly 17% so far in the year, outpacing the S&P 500’s growth of approximately 15%. In fact, strengthening labor market, rising disposable income and an upbeat consumer environment with confidence index reaching a six-month high in May are working in favor of the sector. Further, any rate cut at this juncture will ramp up investment activities and reinforce consumer spending.

We note that consumer spending — one of the pivotal factors driving the economy — has picked up in recent months. This is evident from an uptick of 0.5% in retail sales during the month of May, following an upwardly revised reading of 0.3% gain in April. Clearly, this dissipates the fear of economy losing steam and may prompt economists to revisit their second-quarter GDP numbers.

For obvious reasons, retailers are the end gainers. So, picking up stocks from the space will be a prudent move. Here are four stocks you can count upon. We have shortlisted them on the basis of a Zacks Rank #1 (Strong Buy) or 2 (Buy), a VGM Score of A or B and stock price movement of 10% or more in a month.

 

4 Prominent Picks

Stitch Fix, Inc. SFIX, which sells a range of apparel, shoes, and accessories through its website and mobile app, has a VGM Score of B. The stock has an expected EPS growth rate of 22.5% for 3-5 years. Shares of this Zacks Rank #2 company have rallied about 32.8% in a month. You can see the complete list of today’s Zacks #1 Rank stocks here.

RH RH, which operates as a home furnishing retailer, has a VGM Score of B and an expected EPS growth rate of 9.4% for 3-5 years. This Zacks Rank #2 stock has surged roughly 26.3% in a month.

Target Corporation TGT, a general merchandise retailer, has a VGM Score of B and an expected EPS growth rate of 7.1% for 3-5 years. The stock currently has a Zacks Rank #2. The company gained roughly 20% in a month.     

Casey's General Stores, Inc. CASY, which operates convenience stores, has a VGM Score of A and an expected EPS growth rate of 9.4% for 3-5 years. This Zacks Rank #2 stock has shown a decent run in the bourses and advanced about 15.3% in a month.

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Caseys General Stores, Inc. (CASY) : Free Stock Analysis Report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
Restoration Hardware Holdings Inc. (RH) : Free Stock Analysis Report
 
Stitch Fix, Inc. (SFIX) : Free Stock Analysis Report
 
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