|Bid||43.66 x 1100|
|Ask||44.37 x 800|
|Day's Range||43.43 - 44.19|
|52 Week Range||38.10 - 52.96|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.93|
|Expense Ratio (net)||0.35%|
Christopher Harvey, Wells Fargo, warns investors to stay away from retail and tells them why. With CNBC's Melissa Lee and the Fast Money traders, Tim Seymour, Steve Grasso, Dan Nathan and Guy Adami.
The past month's rousing market rally has been a rising tide lifting all boats. Every sector has participated in the broad-based boom, and some industries have even reclaimed all that was lost during December's disaster. The action in retail stocks has been particularly strong with many attractive stocks to buy. To assess the action, we'll use the SPDR Retail ETF (NYSE:XRT), which counts all of the sector's biggest companies among its holdings. Since bottoming at $38.10, XRT has climbed 15% to test the descending 50-day moving average. Two bullish developments from the past week suggest further upside could be in the offing. First, the down-gap caused by lousy earnings news from Macy's (NYSE:M) on Jan. 10 was rapidly reversed showing dip buyers remain aggressive. Second, XRT's ability to hold firm in the face of overhead resistance suggests sellers are thus far powerless to turn the fund lower. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Top 10 Global Stock Ideas for 2019 From RBC Capital With that said, here are three retail stocks to buy that stand out among the rest in the space. ### Bed Bath and Beyond (BBBY) Bed Bath and Beyond (NASDAQ:BBBY) entered this month's earnings release in desperate need of a positive catalyst. Deteriorating fundamentals have driven BBBY stock down as much as 87% from its 2013 peak before the recent rebound. Fortunately, the company was able to deliver earnings that beat estimates (18 cents versus 17 cents) and report improved guidance for 2019. The stock soared almost 30% in the three days after earnings before pulling back on profit-taking. This three-day retracement is creating an attractive low-risk entry for traders anticipating further upside. BBBY is now above its 20-day and 50-day moving averages, so bulls have wrested control of the short-term trend. And volume patterns look constructive with large volume accompanying the breakout and light volume during this week's retreat. Once BBBY breaks above a prior day's high, buy the May $14/$19 bull call spread for around $1.75. The risk is limited to $1.75, and the reward is limited to $3.25. ### Nike (NKE) The technical posture of Nike (NYSE:NKE) has improved considerably since Christmas. With the 18% rally off the lows, NKE stock has climbed back above all major moving averages, returning to key horizontal resistance near $79. This level has kept a lid on the shares ever since October, which means its eventual break will signal a major victory for bulls. It will also set Nike shares up for a run toward their 2018 high of $86.04. * 10 Growth Stocks With the Future Written All Over Them Implied volatility has come in considerably, making long premium plays more tempting than short ones. Buy the March $80/$85 bull call spread for around $1.50. The risk is limited to $1.50, and the reward is capped at $3.50. ### Lululemon Athletica (LULU) Source: ThinkorSwim Lululemon (NASDAQ:LULU) rounds out today's trio and carries one of the best looking charts in the retail sector. Its recent trend reversal higher received a boost on Monday when the company raised its guidance for fourth-quarter earnings. LULU stock gapped up and has continued climbing each day since. It's now testing an important horizontal resistance threshold around $147. Breaking above it should clear the runway for a ramp toward its all-time high of $164.79. And with all major moving averages now rising beneath the price, I see few reasons why LULU won't continue pushing north. To bank on the continued upside, buy the March $145/$155 bull call spread for $4.25. The risk is limited to $4.25, and the reward is limited to $5.75. As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to protect your portfolio against a crash. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Growth Stocks With the Future Written All Over Them * 7 Reasons Why Buffett's Bet on Apple Stock Is a Good One * 10 Companies That Could Post Decelerating Profits Compare Brokers The post 3 Retail Stocks to Buy As They Rise From the Ashes appeared first on InvestorPlace.
After a volatile December that saw U.S. equities finish their worst year in over a decade, the retail sector was banking on a strong holiday shopping season to shake its own market doldrums. With the ongoing government shutdown delaying retail figures from the Commerce Department, retail investors are left to wonder whether a market cap-weighted strategy or an equal weight strategy will serve them best moving forward. ETF Trends Publisher Tom Lydon joined CNBC's Bob Pisani on the new "ETF Edge" show to discuss the dichotomy of these two strategies inherent in VanEck Vectors Retail ETF (RTH) and SPDR S&P Retail ETF (XRT) .
Shares of Abercrombie & Fitch Co. surged 5.2% in premarket trade Monday, after the apparel retailer affirmed its fourth-quarter outlook. The company said it expects fourth-quarter same-store sales to be up in the "low-single digits" percentage range from a year ago, compared with the FactSet consensus of a 1.2% rise. Abercrombie said it expects net sales to decrease in the "mid-single digits" range, given the negative impact of a calendar shift and changes in foreign currency rates, while the FactSet sales consensus of $1.14 billion implies a 4.8% decline. Abercrombie plans to report full results on March 6. The stock has run up 9.1% over the past three months, while the SPDR S&P Retail ETF has dropped 7.6% and the S&P 500 has lost 6.2%.
Shares of retailers suffered broad, and in many cases a sharp selloffs Thursday, as a number of downbeat holiday-period sales reports sparked concerns over the health of the sector and consumer.
The major stock indexes ended a four-day win streak but losses were minor, while Netflix showed new signs of rising from its deep slump.
Preliminary 2018 holiday retail sales reports were pretty good. Widely followed reports from Mastercard and Adobe both pegged the 2018 holiday season as being a record one, powered by healthy labor conditions, rising wages, strong credit and continuing red-hot growth in the digital segment. As a result, retail stocks rebounded in a big way at the end of December and into January. During that two week stretch, the SPDR S&P Retail ETF (NYSEARCA:XRT) rallied 15%. * 7 Stocks to Buy That Are Ready for Takeoff As it turns out, though, the 2018 holiday season wasn't a big success for everyone in retail. Case in point: Macy's (NYSE:M). The department store stalwart reported holiday numbers in early January that came in well below expectations, forcing the retailer to cut its full-year revenue and profit guides. In response, Macy's stock dropped 20% to below $30. It's hard to argue against the drop. Macy's holiday numbers weren't good, and it is becoming increasingly clear that this is not the same company it was even a few years ago. Other retailers are adapting better to today's dynamic retail environment. Meanwhile, M finds itself somewhat in the gray area of decent prices and decent quality, but doesn't dominate in either category. That lack of dominance equates to a lack of moat -- and that is why consumers are so easily forgetting about Macy's. InvestorPlace - Stock Market News, Stock Advice & Trading Tips As such, the qualitative narrative here is troubled. But that doesn't mean Macy's stock is doomed. Instead, despite the troubled qualitative narrative, this is still a department store giant that has staying power due to its scale, convenience and affordable prices. That long-term staying power implies stable revenue and earnings power over the next several years. Such stability isn't priced into Macy's stock (now below $30), meaning this dip offers an interesting opportunity for contrarian investors. ### Macy's Holiday Numbers Don't Spark Much Confidence The plain and simple here is that Macy's holiday numbers weren't good. While peer Target (NYSE:TGT) -- which has been actively developing multiple omni-channel sales strategies -- reported a 5.7% comparable sales increase during the holiday period, Macy's holiday comp increase was just 1.1%. That's bad, and it speaks to just how slow Macy's has been in adapting to today's retail environment. Moreover, the 1.1% rise marks a significant slowdown from the typical 3%-and-up adjusted comps Macy's has reported all year long. Thus, the sales trajectory is worsening, not improving. Also, margins must've been hit in the quarter, because management not only revised its full year comparable sales growth guide down, but also pushed its margin and profit guides lower, too. As of three months ago, this was a positive-revenue-growth company with expanding gross margins and a stable opex rate. Now, revenue growth is expected to be flat this year, gross margins are expected to be down, and the opex rate is expected to rise. None of that is good news. However, there was one positive takeaway from the holiday report. On a two-year stack basis, comparable sales growth during the holiday period was actually as good as it's been all year. Through the first three quarters of 2018, comparable sales growth was running around 3% and up. But, the laps were in the -2% to -5% range, so the two year stack comp was never greater than 0.4%. Holiday 2018 comparable sales rose 1.1%, on top of a 1.1% gain last year. Thus, on a two-year stack basis, comparable sales rose over 2%. That's markedly better than the year-to-date trend and provides some relief and hope for bulls. ### Macy's Stock Is Reasonably Undervalued The decline in comparable sales growth as the lap got tougher in 2018 implies that this isn't a growth company. But improvement in the two-year stack comp does imply that the company has long-term staying power, since it implies sales on a two-year basis are actually fairly stable. This lines up with common sense. Macy's is a big retailer. Sure, the company is old and hasn't adjusted all that well to the digital era, but it has a huge presence, wide reach, competitive prices and offers all-in-one convenience. As a result, while these stores aren't doing more business than ever, they also aren't going away any time soon. In terms of modeling, that implies tepid sales growth over the next several years alongside flattish margins. That combination strongly implies that Macy's long-term earnings power should stabilize somewhere around $4 per share. The market won't pay a big multiple for that. Historically, Macy's stock trades around 11 times forward earnings. Let's say $4 per share is sustainable in five years. That implies a $44 price target in four years. Discounted back by 10% per year, that implies a price target today of $30. Thus, under $30, Macy's stock looks reasonably undervalued -- even under the assumption that revenues and earnings are simply stable over the next several years. * 7 Stocks at Risk of the Global Smartphone Slowdown ### Bottom Line on M Stock Macy's holiday report was ugly, and not the sort of report that gets bulls excited. But, below $30, all you need for Macy's stock to work is stability in the company's operations and profits over the next several years. That seems doable, making this dip look like a contrarian buying opportunity. As of this writing, Luke Lango was long M and TGT. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks You Can Set and Forget (Even In This Market) * 10 Virtual Assistants for the Future of Smart Homes * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post Buy the Big Dip Below $30 in Macyas Stock appeared first on InvestorPlace.
Bank of America Merill Lynch downgraded Macy’s (M) stock to an “underperform” from a “neutral” after the department store reported weak holiday sales and lowered its outlook for fiscal 2018 (which ends on February 2, 2019) on January 10. Macy’s reported SSSG (same-store sales growth) of 0.7% in the holiday period (November to December) on an owned basis and 1.1% growth on an owned-plus-licensed basis. Macy’s lower-than-expected SSSG and bleak outlook disappointed investors and dragged its stock down 17.7% yesterday.
Shares of Macy's Inc. plunged 17% in premarket trade Thursday, after the department store chain slashed its outlook for profit, sales and gross margin, citing a weakening in sales in late-December. The company reported holiday-period same-store sales growth of 0.7%, compared with 1.0% growth in the same period a year ago. Macy's cut its fiscal 2018 same-store sales growth outlook to approximately 2.0% from 2.3% to 2.55; its net sales outlook to approximately flat from up 0.3% to up 0.7%; its gross margin rate guidance to "down slightly" from "up slightly"; its inventory position to "no change" from "down;" and its adjusted earnings-per-share projection to $3.95 to $4.00 from $4.10 to $4.30, compared with the FactSet consensus of $4.23. "The holiday season began strong - particularly during Black Friday and the following Cyber Week, but weakened in the mid-December period and did not return to expected patterns until the week of Christmas," said Chief Executive Jeff Gennette. He said underperformance in women's sportswear, seasonal sleepwear, fashion jewlery and watches and cosmetics offset strength in fine jewelry, women's shoes, fragrance, dresses, outerwear, active and home. The stock has lost 3.2% over the past three months through Wednesday, while the SPDR S&P Retail ETF has declined 6.1% and the Dow Jones Industrial Average has shed 6.7%.
Shares of Kohl's Corp. sank 7.8% in premarket trade Thursday, after the retailer raised its full-year profit outlook but reported a deceleration in holiday-period sales growth. Same-store sales for the November-to-December period rose 1.2% from a year ago, compared with growth of 6.9% in the same period last year. The company said digital sales grew in the double-digit percentage range. Kohl's raised its fiscal 2018 earnings per share guidance range to $5.50 to $5.55 from $5.35 to $5.55, citing "strong" holiday sales performance. The FactSet EPS consensus is $5.51. The stock has slipped 2.3% over the past three months through Wednesday, while the SPDR S&P Retail ETF has lost 6.1% and the S&P 500 has declined 7.2%.
Shares of Target Corp. rallied 1% in premarket trade Thursday, after the discount retailer holiday-period same-store sales growth that accelerated from a year ago. For the November-December period, same-store sales increased 5.7% from a year ago, with growth driven primarily by traffic and a small increase in the average ticket, compared with 3.4% in the same period last year. All of the core merchandise categories posted growth, led by toys, baby and seasonal gifts. The company affirmed its fourth-quarter same-store sales outlook of a 5% increase and its full fiscal year adjusted earnings per share outlook of $5.30 to $5.50. Separately, the company said Chief Financial Officer Cathy Smith will retire, when a successor is named. Smith joined Target as CFO in 2015. The stock has tumbled 17.5% over the past three months, while the SPDR S&P Retail ETF has lost 6.1% and the S&P 500 has declined 6.3%.
In a tumultuous 2018, Best Buy (NYSE:BBY) suffered more than many other stocks. Best Buy stock was down more than 20%, while Walmart (NYSE:WMT) and Target (NYSE:TGT) were barely down. The SPDR S&P Retail ETF (NYSEARCA:XRT) also was flattish and out-performed the S&P 500. So the 2018 drag on BBY stock is not a general retail problem since those did better than the S&P. Investors clearly have issues with Best Buy. It can't be a matter of valuation, as BBY stock sells at a price-to-earnings ratio of 15. Compare that to Walmart's 54. So it is clear that traders are worried about BBY's prospects. In 2018 and while equity markets were reeling with fears from tariff and rate hike headlines, consumer spending had been on fire. From that sense, retailers should have done better. The holiday shopping period was stronger than anticipated, especially in the U.S. InvestorPlace - Stock Market News, Stock Advice & Trading Tips BBY is the "last man standing" among electronic brick-and-mortar retailers, yet Best Buy stock is still struggling. Best Buy has made improvements. It was once considered to be the Amazon (NASDAQ:AMZN) showroom store where people could touch the products before they bought it on AMZN. This is no longer the case. * 10 Key Emerging-Market Stocks to Buy for Contrarian Investors Consensus now is that BBY and other retailers are finally growing their online sales. In this case, they actually could be taking back some sales from AMZN. BBY is perhaps the only brick-and-mortar doing that. Macy's (NYSE:M) or J.C. Penny (NYSE:JCP) are not taking back their clients from Amazon; they are merely taking away from their own remaining foot traffic. Nevertheless, Best Buy stock still faces a huge problem. Recovering its portion of the pie is one thing, but doing it in a profitable matter that is the ongoing challenge. AMZN built its empire on thin margins like Walmart did decades ago. BBY still has to prove it can compete like that on a similarly thin budget. Onus is on BBY management to prove the viability of this strategy in the long term. So far, Wall Street is not giving them the benefit of this doubt. So I can't argue for the long-term investment in the stock today. But there still is an opportunity in 2019. ### How to Approach Best Buy Stock Today Technically, Best Buy stock has more upside potential and could retest $65 per share. It has recently had a nice 20% rally off the lows, but it still has more room to go. The idea is that it probably won't have much resistance until it hits the prior ledge from which it fell apart in early December. What supports this thesis is that the markets in general are in the process of repairing the crisis of sentiment that we've had all second half of 2018. So Best Buy stock will have the benefit of the general market lift to help it get there. The December employment report was extremely strong, so people in the U.S. are employed. So as long as that continues to be true, consumer spending will remain strong and the economy will be fine. This would be a trading vehicle and I won't want to turn it into an investment. Meaning I would set appropriate stops below. I would also want to exit before the earnings event. I believe there will be too much uncertainty. * 7 Dow Jones Stocks Set to Charge Higher The 2018 holidays were great so BBY management will be under pressure to deliver on expectations. They'd better show it in the result late February. The March options prices are expecting a +/- $10 move up or down on the headline, so my upside target is within reach if I am correct in my thesis. But on the flip side, I should be ready for another dip below $50. Other than a short-term scalp, I see no specific reason to chase it for the long term. If it cannot rally with record holiday sales, then I'd rather bet on stocks that have growth on their side. For retail I'd rather chase AMZN or Costco (NASDAQ:COST). These two are up big even when markets have faltered. Click here and enjoy a free video and more of my market thesis and get an ongoing free copy of my weekly newsletters. Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on Twitter and Stocktwits. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Retail Stocks to Buy for Winning the Online Battle * The 7 Best Stocks in the Entrepreneur Index * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post Best Buy Stock Is a Strong Trade Ahead of Earnings appeared first on InvestorPlace.
Retail stocks are turning a new leaf in the new year. Craig Johnson, chief market technician at Piper Jaffray, believes that the retail move is "a bounce that we can trust" and thinks that the retail-tracking ETF (XRT XRT ) could actually return to a key level in the charts. The inflection point Johnson refers to is the recent reversal from retail's December low.
Lowe's Companies said Friday it plans to hire more than 65,000 people in 2019, including more than 50,000 seasonal hires and nearly 10,000 permanent positions, in an effort to improve customer service and product availability. The stock rose 2.8% in afternoon trade. In the fiscal year ended Feb. 2, 2018, Lowe's had about 310,000 employees, according to the home improvement retailer's latest annual report. The new hires will also include about 6,000 full-time assistant store managers and more than 2,000 technology roles. "We are sharpening our focus on retail fundamentals and simplifying our business," said Chief Executive Marvin Ellison. As part of its plan to simplify operation, the company said it has reduced some in-store support functions, including discontinuing its Project Specialist Interiors program. The announcement comes a month after the company said it would close 51 underperforming stores and other locations, and announced a new $10 billion stock repurchase program. The stock has shed 15.3% over the past three months, while the SPDR S&P Retail ETF has lost 13.2% and the S&P 500 has declined 12.9%.
Shares of GameStop Corp. rocketed 14% in active midday trade Friday, enough to pace the retail sector's gainers, after the Wall Street Journal reported a buyout deal could be announced next month. Trading volume ballooned to 6.2 million shares, compared with the full-day average of about 3.6 million shares. The stock has now run up 27% since it closed Dec. 24 at $11.67, which was the lowest close for the interactive game and consumer electronics retailer's stock since April 2005. In a report out late Thursday, the WSJ report said, citing a person familiar with the matter, that private-equity firms Sycamore Partners and Apollo Global Management have bid for GameStop. The company said last year that it was reviewing strategic alternatives. The stock was still down 19% over the past 12 months, while the SPDR S&P Retail ETF has slipped 7.6% and the S&P 500 has lost 7.3%.
Years after investors began to understand that online retail was not going to destroy Target (NYSE:TGT), TGT stock continues to struggle. Target has altered its retail strategy to keep up with peers. As a result, it posted its most impressive comparable sales growth numbers in years.
Stocks were broadly lower Thursday afternoon, as the S&P; 500 today and other indexes held much of the prior day's outstanding gains.
To receive further updates on this SPDR S&P Retail ETF (NYSEARCA:XRT) trade as well as an alert when it’s time to take profits, sign up for a risk-free trial of Maximum Options today. This morning I am recommending a bullish trade on the SPDR S&P Retail ETF (NYSEARCA:XRT). According to Mastercard SpendingPulse, which provides data on overall retail spending trends, spending increased 5.1% between Nov. 1 and Dec. 24 compared to the prior year.
PreMarket Prep will run a little longer than its usual hourlong slot Thursday morning thanks to a loaded lineup! 8:15 a.m.: Marc Chaikin , Founder of Chaikin Analytics After 40 years on Wall Street as ...
After a good holiday shopping season, Amazon.com and consumer stocks led a market rebound Wednesday.