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ETF & Stock Picks to Defy Subdued September US Retail Sales

Sanghamitra Saha
September retail sales data came in weaker-than-expected. Defy the trend with these stocks and ETFs.

Retail sales in the United States nudged up 0.1% sequentially in September 2018, the same as in the previous month but shy of market expectations of a 0.6% increase. Lackluster sales were due to the lower outlays at restaurants and bars, which went down 1.8%, the maximum since December 2016.

Barring automobiles, gasoline, building materials and food services, retail sales grew 0.5% in September, following a flat reading in September. On a year-over-year basis, retail sales increased 4.7% in September compared with a 6.5% rise in August and the lowest annual gain in seven months.

Around 10 out of the 13 major retail categories exhibited a rise in sales in September from the previous month, as per tradingeconomics. Sales rose at furniture and home furniture stores (1.1% increase compared to -0.8% decline); non-store retailers (1.1% rise compared to 0.5% increase); electronics and appliance stores (0.9% advancement compared to 0.6% rise); and motor vehicles and part dealers (0.8% rise compared to -0.5% decline).

Against this backdrop, we recommend a few ETFs and stocks that defied the decline in September retail sales data (read: Wave of Solid Q2 Results Boosts Retail ETFs).

Online Stores

Though brick-and-mortar retailers have been steady in recent times, the appeal of online retailing has been high. Sales at online store retailers increased 1.1% after 0.5% gains in August. Such consistency puts Amplify Online Retail ETF IBUY in focus. ProShares Long Online/Short Stores ETF CLIX also deserves a look (read: E-Commerce Face-Off: Wal-Mart Vs. Amazon ETFs).

Amazon.com Inc. (AMZN)

The Zacks Rank #2 (Buy) company is in the retail sale of consumer products and subscriptions in North America and internationally. It comes from a top-ranked Zacks industry (top 38%) at the time of writing.

Electronics and Appliance Stores

The segment saw sales gain of 0.9% in September, rebounding from an increase of 0.6% in August. VanEck Vectors Semiconductor ETF (SMH) should thus be under watch.

NeoPhotonics Corporation (NPTN)

The Zacks Rank #2 company is engaged in the design and manufacture of photonic integrated circuit, or PIC, based modules and subsystems for bandwidth-intensive, high-speed communications networks. The stock comes from a top-ranked Zacks sector (top 31%) at the time of writing.

Furniture and Home Furniture stores 

There were 1.1% increases in furniture and home furniture stores from a 0.8% decline seen in August. This makes it important to take a look at VanEck Vectors Retail ETF (RTH) as the company invests about 11% of its weight in Home Depot (read: ETFs to Bet on the Upcoming Holiday Season).

 Haverty Furniture Companies Inc. (HVT)

This Zacks Rank #2 company is a full-service home furnishings retailer in the Southern and Midwestern regions. The stock comes from a top-ranked Zacks sector (top 19%), at the time of writing.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
NeoPhotonics Corporation (NPTN) : Free Stock Analysis Report
 
VANECK-SEMICON (SMH): ETF Research Reports
 
VANECK-RETAIL (RTH): ETF Research Reports
 
AMPL-ONLN RETL (IBUY): ETF Research Reports
 
Haverty Furniture Companies, Inc. (HVT) : Free Stock Analysis Report
 
PRO-L ONL/S STR (CLIX): ETF Research Reports
 
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