ETF Areas & Stocks to Win Despite Muted June Retail Sales
Retail sales in the United States gained 0.2% sequentially in June of 2023, following an upwardly revised 0.5% increase in May, but below forecasts of a 0.5% rise. However, sales rose in June for three months in a row, indicating a resilient consumer base. The so-called core retail sales which exclude automobiles, gasoline, building materials and food services surged 0.6% in June.
Below we highlight a few areas and the related ETFs that may benefit handsomely.
Winning Areas
Motor Vehicle & Parts Dealers
Sales of this category gained 0.3% sequentially in June and up 5.3% year over year.
First Trust S-Network Future Vehicles & Technology ETF (CARZ) follows the S-Network Electric & Future Vehicle Ecosystem Index constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.
Group 1 Automotive Inc. (GPI) is one of the leading automotive retailers in the world, with operations primarily located in the United States and the UK. The stock has a Zacks Rank #2 (Buy).
Non-Store Retailers
Sales at non-store retailers rose 9.4% year over year in June. Sequentially, sales are up 1.9%.
ProShares Online Retail ETF (ONLN) tracks the ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels.
The Zacks Rank #2 Booking Holdings (BKNG) has agreements with hotels, airlines companies, cruise ships, transport companies and vacation providers, which enable it to accept bookings on their behalf. Information on these offerings and customer reviews are available on the company’s owned or operated websites, thus helping customers take informed decisions.
Food and Drink Places
Sales at restaurants and bars increased 8.4% year over year and 0.1% sequentially.
AdvisorShares Restaurant ETF (EATZ) – The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business. The fund charges 99 bps in fees.
McDonald's (MCD) – McDonald’s is a leading fast-food chain that currently operates more than 39,000 restaurants in more than 100 countries. The fund has a Zacks Rank #2.
Electronics & Appliance Stores
Sales gained 1.1% sequentially in June and 0.9% year over year. Rise in electronics sales should boost semiconductor funds and stocks
VanEck Vectors Semiconductor ETF (SMH) – The underlying MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment. The fund charges 35 bps in fees.
Best Buy (BBY) – As far as stocks are concerned, investors can take a look at BBY. It is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, health, security, appliances and related services. The fund has a Zacks Rank #3.
Miscellaneous Store Retailers
The segment saw a 2.0% sequential gain in sales. The segment’s sales were 1.5% higher year over year.
SPDR S&P Retail ETF XRT – The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Retail Index is a modified equal weight index.
Walmart (WMT) – The Zacks Rank #2 company has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player.
Furniture & Home Furnishing Stores
The segment saw a 1.4% sequential gain in sales, though sales were down 4.6% year over year.
VanEck Retail ETF (RTH) – The underlying MVIS US Listed Retail 25 Index tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. The fund houses two top home improvement companies – Home Depot and Lowe’s Corp. Both companies hold about 13% of the fund.
Home Depot (HD)– The Zacks Rank #3 company is the world’s largest home improvement specialty retailer.
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Walmart Inc. (WMT) : Free Stock Analysis Report
Best Buy Co., Inc. (BBY) : Free Stock Analysis Report
McDonald's Corporation (MCD) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report
SPDR S&P Retail ETF (XRT): ETF Research Reports
VanEck Retail ETF (RTH): ETF Research Reports
VanEck Semiconductor ETF (SMH): ETF Research Reports
First Trust S-Network Future Vehicles & Technology ETF (CARZ): ETF Research Reports
Booking Holdings Inc. (BKNG) : Free Stock Analysis Report
ProShares Online Retail ETF (ONLN): ETF Research Reports
AdvisorShares Restaurant ETF (EATZ): ETF Research Reports
