|Bid||0.00 x 4000|
|Ask||38.64 x 1800|
|Day's Range||38.13 - 38.73|
|52 Week Range||37.46 - 52.96|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.08|
|Expense Ratio (net)||0.35%|
American Apparel & Footwear Association (AAFA) CEO & President Rick Helfenbein sits down with Yahoo Finance's Adam Shapiro, Julie Hyman, and Cornell Capital Partner Ann Berry to discuss how tariffs are impacting the retail industry and American consumers.
While the delay in tariff has been greeted by the broad stock market, sectors which are the most sensitive to trade issues, seem to be the biggest beneficiaries.
U.S. retail sales handily beat market expectations in June. Some particular industries have shone promises, putting these ETFs and stocks in focus.
It's no secret that retail stocks have had a tough decade. Amazon (NASDAQ:AMZN) came onto the scene and decimated the sector stocks. Worst hit were the traditional brick-and-mortar retailers like Macy's (NYSE:M). Many perished and most of the rest are still working triple overtime to try and find ways to deal with this major industry shift. For the most part, the Amazon riddle still lingers.Perhaps it's the advent of many technological changes that also came about at the same time that added to the confusion in the space. The whole world suddenly switched its shopping trend from walking the malls to surfing the net.The new digital way of shopping is far too convenient and effective that the draw is very strong and the migration to it is exponential. Meaning this trend is irreversible.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut it would be wrong to paint all retail stocks with one broad ugly brush. There are still gems in the rough. Amazon clearly is one since it is the cause of the debacle. Lululemon (NASDAQ:LULU) and Ulta (NASDAQ:ULTA) are two other ones that still shine on main street as well as Wall Street.Today, we examine ways to trade these three stocks from both the short- and long-term perspectives.But first we have to note that the S&P 500 is at all-time highs, which means that there are a lot of fresh profits. And so this means buying stocks now has by definition considerable downside immediate risk. * 10 Monthly Dividend Stocks to Buy to Pay the Bills Nevertheless, owning AMZN, LULU or ULTA stock for the long-term has rewarded investors well. This will continue since their management teams are proven winners. Amazon (AMZN)Source: Shutterstock This is the beast that killed the old ways of shopping. It did it with thin margins. They drove the competition to their knees all-the-while critics doubted and mocked them for losing money.Under the leadership of Jeff Bezos, it sacrificed profits to grow their piece of the pie. That is a template that every growth company should follow. A startup has to spend a lot to grow a lot.AMZN took this to an extreme because it did not stop down one vertical. It tested hundreds and landed a few home runs. Most notably was the success of its AWS. It now dominates the cloud and the other giants like Microsoft (NASDAQ:MSFT) are merely playing catch up.So the decision to buy Amazon stock is a an easy yes. As to the exact timing, it's a trickier answer that depends on an investor's time frame. Short term, this is a momentum stock, so it moves fast. Last week, it triggered a bullish pattern and it's unfolding still. But in the long term, timing won't matter much.A twist: This week, Netflix (NASDAQ:NFLX) reports earnings and it will likely move the whole FANG gang, including AMZN stock. So buying AMZN now would make for a relatively safe lotto trade on NFLX earnings. Lululemon (LULU)Source: Shutterstock Other than the infamous see through pant debacle, LULU management hasn't given investors reason to worry. They have been consistent in their execution on plans.Yoga-wear is now a very popular category of clothing and they have expanded on it still for both men and women. I don't know the statistics on it, but I bet that there are much more non-yoga activities done in LULU clothes than yoga.The point is that they have done a great marketing job and shoppers assimilated their wears as a way of life. That's why they continue to impress Wall Street as Main Street struts LULU wears.Fundamentally, LULU stock is expensive at price-to-earnings ratio of 50 and 7X sales. But then again, investors have given LULU a pass on that front as long as it continues to grow.Year-to-date, LULU stock is up 54%, which is 15 percentage points higher than AMZN and much better than the SPDR S&P Retail ETF (NYSEARCA:XRT). Clearly Lululemon is doing well.Technically, Lululemon stock is at all-time highs, so it's hard to discern much from that except to say it's okay if it falls a bit from here to establish the recent breakout line as forward support. As long as LULU holds about $175 per share, the short-term trend is intact. * 7 Stocks Being Inflated by Low Rates There is a big open gap down to $150 per share but I think this would need serious bad news to get filled. Ulta Beauty (ULTA)Source: Shutterstock The case for ULTA stock is very similar to LULU. Ulta is also in control of its product lines and it has done a masterful job at marketing. Its clients are loyal and keep buying the whole image as a way of life.The selfie generation wants to look good at all times and the "influencers" on social media are making massive impacts.Ulta stock is slightly cheaper than LULU as it sells at 30 P/E and only 3X sales. But compared to retail stocks in general, it's not a massive bargain either. But as with the two other stocks today, this one is also worth it for the longer term.It's succeeding as a growth stock, so it's acceptable for it to be more expensive. YTD, Ulta stock is up 45%, which is 9X better than the XRT and 2X better than the S&P 500. So just like all of today's stocks, you get what you pay for.Technically, ULTA is also near highs, but it still has room to run. The 50% rally off the December lows, even though it has gone so far already, could be leg 1 of 3 of a pattern to target $420 per share.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. Join his live chat room free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post 3 Retail Stocks to Buy Now appeared first on InvestorPlace.
Retail stocks have been a tough trade in 2019. While the S&P 500 is up nearly 20% year-to-date, the SPDR S&P Retail ETF (NYSEARCA:XRT) is up just 3%, as retail stocks have been weighed by sluggish consumer spending in early 2019 and overarching trade conflicts. The sum of those headwinds has weighed on revenues and margins, and profit growth rates in the consumer discretionary sector actually dropped into negative territory in the first quarter of 2019, while S&P 500 earnings rose 4%.But, Goldman Sachs thinks things are about to get a whole lot better for a whole lot of retail stocks.The thesis?InvestorPlace - Stock Market News, Stock Advice & Trading TipsGoldman Sachs believes that: 1) the macro consumer economic environment is improving, supported by low unemployment and strong wage gains, and that such improvement will re-accelerate retail revenue growth rates; 2) trade issues are being overblown in the near term and have a chance to cool off in the medium to long term; and 3) after years of investing into their e-commerce operations, big box retailers are ready to reap the operating income growth rewards of those investments. * 10 Stocks Driving the Market to All-Time Highs (And Why) Owing to these three core beliefs, Goldman Sachs has a Buy rating on several retail stocks. Which stocks made the cut? And will those stocks actually outperform from here? Let's take a closer look at nine retail stocks that Goldman thinks are ready to rally. Target (TGT)Source: Mike Mozart via Flickr (Modified)The Bull Thesis: Goldman's top pick is Target (NYSE:TGT), and the thesis here is pretty straight-forward. Target has invested big into its e-commerce and omni-channel business over the past few years. Now, the company's e-commerce business is the fastest growing online retail business among big name retailers, and Target's comparable sales growth has also been among the best in the business over the past few quarters. Thus, these investments are paying off in the form of supercharged top-line growth. Over the next few quarters, the cost base from these investments will start to moderate, too, and supercharged revenue growth will be accompanied by supercharged profit growth. That profit growth will converge on a reasonable valuation (14-times forward earnings) to spark a nice rally in TGT stock.Does It Hold Water? Yes. TGT stock is one of my favorite retail stocks for the foreseeable future, too, because this company is firing on all cylinders, continues to be relentlessly innovative, has big profit growth potential in the medium term, and continues to trade at a relatively discounted valuation. That combination ultimately implies that Target stock has runway to move higher over the next few quarters. Costco (COST)Source: Shutterstock The Bull Thesis: Another big box retailer that Goldman is bullish on is Costco (NASDAQ:COST). Much like Target, the bull thesis on COST stock is pretty straightforward, too. With Costco, you have the offline version of Amazon (NASDAQ:AMZN), which has leveraged low price appeal to create a huge base of loyal Costco members that shop at Costco often and in heavy volume. That loyal membership base will continue to power healthy results for the retailer for the foreseeable future, so long as consumer economic conditions remain favorable. If they do, those healthy results will in turn continue to drive COST stock higher. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Does It Hold Water? Yes. But, with one important catch: valuation. Unlike other retail stocks on this list, COST stock isn't dirt cheap. Instead, it's the opposite of dirt cheap. It's an expensive stock, at 34-times forward earnings for what projects as a 10% profit grower over the next several years. That isn't a terribly attractive combination, so in the the near term, valuation friction may limit further gains in COST stock. Walmart (WMT)Source: Shutterstock The Bull Thesis: Goldman is also bullish on the 800 pound gorilla in the retail world: Walmart (NYSE:WMT). The Walmart thesis is very similar to the Target thesis. Walmart has aggressively reinvented itself over the past several years as an omni-channel retailer with a red-hot e-commerce business, enhanced in-store presentations and multiple omni-channel capabilities like "buy online, pick up in store". This reinvention has powered decade-best comparable sales and traffic growth at Walmart over the past few quarters. But, this reinvention has also been expensive, and weighed on margins. Going forward, the cost base from these investments should moderate, and robust profit growth should come back into the picture. As it does, WMT stock should trend higher.Does It Hold Water? Yes. Much like TGT stock, WMT stock will head higher over the next few quarters as robust revenue growth and margin improvement will converge on a still reasonable valuation (23-times forward earnings) to drive share price out-performance. Home Depot (HD)Source: Shutterstock The Bull Thesis: In the home improvement space, Goldman is bullish on shares of Home Depot (NYSE:HD). Home improvement market fundamentals are favorable, driven by low rates, low unemployment, strong wage gains and good credit. Home Depot is the leader in this market, and has been for some time. As such, as home improvement spend increases over the next few quarters, Home Depot's growth rates should move higher. As those growth rates move higher, HD stock should trend higher, too. * 7 Dependable Dividend Stocks to Buy Does It Hold Water? Yes. The valuation supporting HD stock remains reasonable, as the stock trades at just 21-times forward earnings for what projects as roughly 10% profit growth over the next several years. That favorable valuation, coupled with favorable market fundamentals and continued strong numbers, will keep HD stock on a healthy uptrend for the foreseeable future. Lowe's (LOW)Source: Mike Mozart via Flickr (modified)The Bull Thesis: Goldman likes home improvement retailer Lowe's (NYSE:LOW), too, for the same reasons they like Home Depot. The home improvement market is supported by strong fundamentals at the current moment. Over the next few quarters, those strong fundamentals should drive higher home improvement spend. Some of that spend will land at Home Depot. Some of it will land at Lowe's. As such, Lowe's growth trend should improve into the back half of 2019. As it does, LOW stock should move higher.Does It Hold Water? Yes. LOW stock was unfairly beaten up in May on margin concerns in its Q1 earnings report. But, those margin headwinds are ephemeral, and should ease going forward. As they do, that easing will couple with strong top-line momentum (Lowe's also reported its best comp in recent memory last quarter) to produce robust profit growth. Simultaneously, LOW stock trades at a discount relative to HD stock (19-times forward earnings for LOW, versus 21-times for HD). This relative discount plus strong profit growth should equal big returns for LOW stock in the back half of 2019. BJ's (BJ)Source: Shutterstock The Bull Thesis: In the smaller cap retail world, Goldman is bullish on BJ's (NYSE:BJ). The bull thesis on BJ stock rests on two things. First, the macro consumer economic environment is improving, and supports strong consumer spend in the back half of 2019. Second, BJ's is a wholesale club retailer, and the club model of leveraging low price appeal to create a loyal membership base (from which you generate substantial revenue) is a winning model -- see Amazon and Costco. Thus, BJ's has a winning strategy in a market gaining momentum, and that implies healthy growth potential for BJ stock going forward. * 7 Companies Apple Should Consider Buying Does It Hold Water? Yes. BJ's is basically like a mini-Costco with an East Coast focus and very low prices, meaning that this warehouse retailer has cut out a sustainable niche for itself in the discounted retail segment. Further, BJ stock trades at just 15-times forward earnings (versus a 34-times forward multiple for COST), so there's substantial room for multiple expansion here in the event that BJ's continues to report healthy numbers (which it should). O'Reilly Automotive (ORLY)Source: JJBers via Flickr (modified)The Bull Thesis: Goldman also has a buy rating on O'Reilly Automotive (NYSE:ORLY). O'Reilly Automotive is an auto parts retailer which has grown revenues at a fairly steady mid-single-digit rate for the past several years, during which the auto parts market in the U.S. has grown at a low-single-digit rate. Because of this track record of above-market growth, Goldman likes ORLY stock in the back half of 2019, when the auto parts segment should benefit from increased demand as rates drop and the auto market rebounds.Does It Hold Water? Yes. So long as the U.S. consumer economy remains healthy and stable (as it projects to for the foreseeable future), then you can count on O'Reilly to deliver stable mid-single-digit revenue growth alongside gradual margin expansion. That combination on top of a 22-times forward multiple should produce healthy returns in ORLY stock going forward, especially with depressed interest rates broadly inflating equity valuations. Tractor Supply (TSCO)The Bull Thesis: Back to the home improvement world, Goldman also likes home improvement and agricultural goods retailer Tractor Supply (NASDAQ:TSCO). The bull thesis on TSCO is simple. Macro conditions in the home improvement and agriculture markets are favorable, and Tractor Supply's retail locations are largely rural and insulated from being disrupted by the big-box same-day-delivery push. This insulation coupled with favorable market conditions should drive sustained healthy profit growth over the next few years, and keep TSCO stock on a winning path. * 10 Stocks to Buy for Less Than Book Does It Hold Water? Yes. The valuation on TSCO stock, while not cheap, is certainly reasonable, at 23-times forward earnings for what projects as double-digit profit growth (comprised of mid-single-digit revenue growth and gradual margin expansion). So long as interest rates remain low, this combination of a ~20 forward multiple and ~10% profit growth should work for TSCO stock. Williams-Sonoma (WSM)Source: Mike Mozart via FlickrThe Bull Thesis: Tariff concerns have been a huge headache for Williams-Sonoma (NYSE:WSM), but Goldman thinks that the kitchenware and home furnishings retailer is ready to bounce back. Trade tensions are cooling, and with a truce on new tariffs between the two countries, it seems the worst of the trade war damage has already been inflicted. Going forward, the numbers here should get better, especially as buying conditions in the U.S. improve, too. This improvement should drive a nice rebound in WSM stock.Does It Hold Water? Yes. Of all the retail stocks on this list, WSM is among one of the cheapest, at just 13-times forward earnings. To be sure, that's because revenue growth and profit growth are relatively muted here (WSM projects as a mid single-digit profit grower). But, that growth trajectory could inflect higher as trade issues become old news. In the event that happens, sentiment will improve, and WSM stock will benefit from substantial multiple expansion.As of this writing, Luke Lango was long TGT, AMZN, WMT, HD and LOW. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dependable Dividend Stocks to Buy * 10 Stocks Driving the Market to All-Time Highs (And Why) * 7 Short Squeeze Stocks With Big Upside Potential The post 9 Retail Stocks Goldman Sachs Says Are Ready to Rip appeared first on InvestorPlace.
Amazon's fifth annual Prime Day is gearing up to be another record-breaking event, but it doesn't necessarily deliver outsized returns for investors.
Parents of children in grades kindergarten through 12 will spend a record average of $696.70 on backpacks, notebooks and more this back-to-school season, up from $684.79 last year, according to the National Retail Federation. The previous record was $687.72 in 2017. Overall spending is expected to reach $26.2 billion, down from $27.5 billion last year, with fewer adults surveyed saying they have children in these grades. Deloitte forecasts a more upbeat $27.8 billion back-to-school spend for families with children in kindergarten through grade 12. Families with college students expect to spend $976.78 on average, up from $942.17 last year and ahead of the record $969.88 set in 2017. Once again, overall spending is expected to fall, down to $54.5 billion from $55.3 billion, due to fewer families reporting that they will have someone attending college. The Amplify Online Retail ETF is up nearly 26% for the year to date, the SPDR S&P Retail ETF has gained nearly 5%, and the S&P 500 index is up 20.2% for the period.
Amazon, who is getting ready to move thousands of its employees from its headquarters in Seattle to new digs in Bellevue Washington, after a tax issue over new business, said it will train up to 100,000 employees, or one-third of its U.S. workers, into more skilled labor, company officials announced Thursday. The decision, which accompanies an investment of $700 million for the retail behemoth's "Upskilling 2025" pledge, arises during a period of historically low U.S. unemployment, and as workers at tech companies are becoming more and more vocal about working conditions. The program goals are to "provide people across its corporate offices, tech hubs, fulfillment centers, retail stores, and transportation network with access to training programs that will help them move into more highly skilled roles within or outside of Amazon," according to the company's press release.
Fred's Inc. said Friday it was closing an additional 129 retail stores across 13 states, which will leave the Memphis-based discount retailer with 80 stores. The additional closures comes after the company announced the closing of more than 300 stores over the past few months. As of Feb. 2, the company had 568 general merchandise stores in 15 states. The company said all pharmacies, including the 69 within the 129 additional retail locations being closed, will remain open. The stock has plunged 77% year to date through Thursday, while the SPDR S&P Retail ETF has gained 3.6% and the S&P 500 has rallied 20%.
Shares of Levi Strauss & Co. plummeted 12% in midday trading Wednesday, which would be by far the biggest one-day selloff since going public in March, after the jeans seller reported second-quarter earnings and revenue that beat expectations, but provided a conservative outlook. The selloff comes the stock had soared 13% amid a six-day winning streak leading up to the results, which were revealed after Tuesday's close. In the post-earnings conference call with analysts, Chief Financial Officer Harmit Singh said he expects second-half sales growth to "moderate" relative to the first half, and anticipates "pressure" in the wholesale channel given the overall softening environment and lower off-price channel sales. J.P. Morgan analyst Matthew Boss reiterated his overweight rating on Levi's stock after the "quality" second-quarter results and outlook. The stock has now lost 8.4% over the past three months, while the S&P 500 has gained 3.6%.
The stock market is having its best year since 1997. Retail stocks, though, didn't get an invite to the party. Year-to-date, the S&P 500 is up a whopping 18%. As for retail stocks, the SPDR S&P Retail ETF (NYSEARCA:XRT) is up a meager 3%.Let's put this in context. The unemployment rate in the U.S. is at record lows. Wage growth is running at decade highs. Consumer confidence and sentiment have surged higher in 2019. Rates have dropped. Credit is good. Households aren't overly leveraged. Everything is going right for the U.S. consumer.Yet, despite everything going right, retail stocks are still up just 3% year-to-date, versus an 18% gain for the S&P 500. Why? The trade war, and a sluggish consumer in early 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut, the U.S.-China trade war has been put on hold. It looks increasingly likely that a deal will be struck soon. At the same time, the Fed projects to cut rates this summer, and that should goose the economy and reinvigorate the consumer.Thus, the two headwinds that have killed retail stocks year-to-date, could reverse course this summer, and turn into tailwinds by the end of the year. That reversal ultimately means that retail stocks have big upside potential over the next several months from today's depressed levels. * 10 Stocks to Buy on College Students' Radars Which retail stocks should you buy to play this retail recovery rally? Let's take a look. Foot Locker (FL)Source: Mike Mozart via Flickr Athletic footwear retailer Foot Locker (NYSE:FL) has had a tough time over the past few years. The athletic retail market has shifted from wholesale retail to direct retail, and that shift has meant lower sales volume through wholesale retail distributors like Foot Locker. But, this shift has normalized over the past few quarters. As it has, Foot Locker's numbers have improved, and the stock has moved higher.The trade war knocked this FL recovery off course in 2019. Foot Locker is at the epicenter of the trade war, since the athletic footwear industry outsources a lot of production to China. As such, higher tariffs on China imports stand to significantly and adversely impact Foot Locker's numbers. Investors have been persistently nervous about this, and FL stock has dropped as trade tensions have hung around.Those trade tensions are now de-escalating. A deal looks likely soon. At the same time, the Fed is going to cut rates, and that will reinvigorate a sluggish consumer. The financial implications for Foot Locker? Stronger comparable sales growth and higher margins. That combination should ultimately spark a big rally in FL stock, which presently trades at an anemic 8-times forward earnings multiple. Macy's (M)Source: Mike Mozart via FlickrMuch like Foot Locker, mall retail giant Macy's (NYSE:M) has had a tough time over the past several years as the retail world has shifted from wholesale to direct. This shift has pushed consumers to direct-focused retail platforms like Amazon (NASDAQ:AMZN). Macy's has had trouble keeping up. Sales, margin and profit trends have been weak. Macy's stock has also been weak.Adverse secular trends coupled with trade war headwinds have pushed Macy's stock to depressed levels in 2019. We are talking 7-times forward earnings and a 7%-plus dividend yield. In other words, the sentiment is so negative surrounding Macy's stock that the stock is now essentially priced for profit trends to remain weak forever. * 10 Best Stocks for 2019: A Volatile First Half That won't happen. A trade deal and rate cuts will provide a big tailwind to the retail industry in the back half of 2019. This rising tide will lift all boats, even the beaten-up ones like Macy's. As such, Macy's profit trends will improve throughout the course of 2019, and as they do, Macy's stock should rally in a big way given its presently depressed valuation. Crocs (CROX)Source: Shutterstock Unlike Foot Locker and Macy's, sandal footwear brand Crocs (NASDAQ:CROX) has actually experienced tremendous success over the past few years. The brand orchestrated a huge operational turnaround in the mid-2010's through narrowing the product portfolio and focusing on the company's classic foam clog. Doing so reinvigorated revenue growth and cut expenses from the operating model, which produced robust profit growth. That robust profit growth propelled CROX stock from $6 in mid-2017, to over $30 by early 2019.The CROX turnaround hit a road-bump in early 2019. First quarter numbers weren't good. Sales growth slowed and gross margins tightened. The outlook wasn't great, either. Broadly, Crocs reported early 2019 numbers that implied that the best of the CROX turnaround is over. Investors proceeded to dump CROX stock. The stock now trades 35% off its 2019 highs.But, since those ugly early 2019 numbers, U.S. labor markets have remained healthy, rates have plunged, and trade tensions have eased. Plus, consumer interest with respect to Crocs has only surged higher since then, and the company just scored a big partnership with Vera Bradley.In other words, recent data implies that the best of the CROX turnaround is not over, the company the will report strong second-quarter numbers soon, and CROX stock is due for a nice recovery rally. Nordstrom (JWN)Source: Shutterstock Similar to Macy's, mall retail giant Nordstrom (NYSE:JWN) has struggled over the past several years to drive traffic gains against the backdrop of a consumer exodus from physical to digital shopping channels. These struggles got really bad in early 2019. The company recently reported awful first-quarter numbers that included negative comparable sales growth and margin compression. Management also cut the full year 2019 guide. In response, JWN stock tumbled.But, really bad early 2019 numbers were an anomaly produced by ephemeral headwinds, such as poor execution on a new loyalty program and a lack of digital marketing spend. Those two hiccups have been remedied. As such, it is likely that Nordstrom's numbers improve meaningfully into the summer, especially with trade tensions cooling, the labor market healthy and a rate cut on the way. * The 7 Best Long-Term Stocks to Buy for 2019 and Beyond Improving numbers should spark a rally in JWN stock. The stock trades 50% off recent highs. It's also at a decade-low valuation level. This combination of fundamental improvements and a depressed valuation give the stock ample firepower to shoot higher over the next few months. Canada Goose (GOOS)Source: Shutterstock Luxury outdoor apparel brand Canada Goose (NYSE:GOOS) was once one of Wall Street's favorite retail stocks, due to its robust growth trajectory. Then, the company reported sub-par fourth-quarter numbers that comprised of slowing growth trends and delivered a disappointing long-term growth guide. The implication? The growth trajectory here isn't as robust as everyone thought it was. GOOS stock subsequently dropped.But, Canada Goose is still a 20%-plus revenue growth company with a healthy and expanding margin profile. Net net, that should drive 20%-plus profit growth, versus an average long-term profit growth rate across the retail segment of below 10%. For that sub-10% growth, retail stocks are trading at 18-times forward earnings. For more than double that growth potential (20%-plus profit growth), GOOS stock is trading at less than double the retail average valuation (30-times forward earnings).Thus, relative to other retail stocks, GOOS stock now gives investors more bang for their buck. As such, as the broader retail industry rallies over the next several months thanks to cooling trade tensions and rate cuts, GOOS stock should generate alpha relative to its peers due to its attractive fundamentals and favorable valuation. Dollar General (DG)Source: Mike Mozart via FlickrYou want to buy off-price retail giant Dollar General (NYSE:DG) because this company has found a winning strategy in the dynamic retail landscape, and it will continue to leverage that winning strategy to drive high-quality profit growth over the next several years.Over the past decade, Dollar General has honed in on becoming a go-to off price destination for consumer staples products. Because consumers always need to buy consumer staples products, and because consumers always love low prices, this retailing strategy has produced strong sales and profit growth for Dollar General over the past several years.This strong growth continued in early 2019, when the rest of retail broadly reported bad numbers. It's also expected to persist for the rest of the year, as management delivered a healthy full-year 2019 guide in the company's last earnings report. The implication? Dollar General will continue to leverage its winning off-price retailing strategy to drive big profit growth for the next several quarters and years, regardless of how the rest of the retail shapes up. * 7 Simple Ways for Young Investors to Invest Their First $1,000 So long as the profit growth trend here remains favorable, DG stock should continue to move higher. As such, the smart move here is to stick with the rally in DG stock for the foreseeable future. Lowe's (LOW)Source: Mike Mozart via Flickr (modified)The bull thesis on Lowe's (NYSE:LOW) is pretty simple. For all intents and purposes, Home Depot (NYSE:HD) and Lowe's are largely the same company, so their stocks should trade at similar valuations. Normally, they do. But, every once in a while, LOW stock trades at a sizable discount to HD stock. Whenever this valuation discrepancy arises, it's usually a signal to buy LOW stock (so long as the economic backdrop remains favorable).That's exactly where we are today. HD stock trades north of 20-times forward earnings. LOW stock trades at just 18-times forward earnings. That's the biggest valuation discrepancy between these two stocks over the past three years. Meanwhile, the economic backdrop is favorable (low rates, full labor market, big wage gains, etc.), and Lowe's actually just out-comped Home Depot last quarter.Net net, LOW stock presently trades at a sizable discount to HD stock, but the fundamentals say it shouldn't. Ultimately, the fundamentals will win out here, meaning LOW stock is due for a nice rally over the next few months.As of this writing, Luke Lango was long FL, M, AMZn, CROX, JWN and LOW. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Best Stocks for 2019: A Volatile First Half * 7 Simple Ways for Young Investors to Invest Their First $1,000 * 6 Stocks to Buy Based on Insider Buying The post 7 Retail Stocks to Buy for the Second Half of 2019 appeared first on InvestorPlace.
RealReal Inc. began trading Friday, soaring 45% higher than the $20 IPO price. The company priced above its price range of $17 to $19. The RealReal, a luxury consignment retailer, has gone public as the secondhand retail market grows, with the category expected to reach $51 billion in the coming years. The company uses proprietary technology and trained experts to develop its network of sellers and make available a range of unique, high-end luxury goods. The SPDR S&P Retail ETF has gained 3.6% for the year to date while the S&P 500 index is up 17% for the period.
There is not a person on this planet who doesn't know Nike (NYSE:NKE). It's a household name on every continent. Last night the company reported earnings and Nike stock is active on the news. So is it too late to get in?Source: rodrigofranca via FlickrNo. Nike stock is a long-term winner and belongs in every serious investment portfolio. This is a proven management team that hasn't taken a misstep in decades. They have had their fair share of controversies but they always manage to use them to their advantage. So the bear thesis for NKE is thin and most likely a losing proposition.Buy and hold this one.InvestorPlace - Stock Market News, Stock Advice & Trading TipsI would have loved to see a big dip so I can catch the falling knife as others erroneously panic out of their positions, but it looks like Wall Street came to its senses quickly.The earnings report wasn't all gold stars, but it didn't leave many reasons to sell it, even though they tried. Last night, the initial reaction to the headline was a sharp 4.5% dip, but it quickly turned around. * 7 Stocks on Sale the Insiders Are Buying Management missed on earnings which is atypical for them, especially given that expectations weren't too high. But met or beat pretty much everything else. There was a lot of trepidation coming into the earnings, which explains the after hour u-turn action in NKE stock.The U.S. performance was twice as strong as expected and in some sense China was strong too. NKE managed to grow their pie there despite of the geopolitical headwinds. They delivered decent margins in spite of the operational and sourcing threats that stem from the tariffs.In short, the earnings report had nothing alarming, so the ongoing long-term bullish thesis on NKE doesn't change. And anyone disappointed with last night's report has unrealistic expectations and should reconsider their position on the stock.Going long, Nike stock works for long-term investors as well as short-term tactical trades.Yesterday's report shows that the future growth is intact. So if I am bullish stocks in general, then there is no reason to expect NKE to fall alone. This is still the benchmark for all athletic footwear competitors if not all of retail.Nike is a cut above the rest. It has led its industry for decades and it keeps upping the ante. They shine even in the face of controversies like we saw last year. Critics often contend that Under Armor (NYSE:UA) or Adidas (OTCMKTS:ADDYY) is eating its lunch but it never pans out that way. Nike still reigns supreme and by a long margin. Bottom Line on Nike StockValuation is not a concern since it sells at 32 price-to-earnings ratio and 3.5 times sales. NKE doesn't really have a profitable comparable. UA still struggles with the zero profit line. But I like to compare it to Lululemon (NYSE:LULU) and NKE is 40% cheaper than that. They both are retail giants who control their inventory and labels tightly.So from that sense, NKE is still a bargain. Yet the stock is still not frothy so there is room for upside. While Nike stock is out-performing the SPDR S&P Retail ETF (NYSEARCA:XRT), it was only up 14% year-to-date coming into the earnings. UA, Adidas and LULU are up three times as much for the same period. Clearly, Nike has some catching up to do. * 10 Small-Cap Stocks That Look Like Bargains So, buying Nike stock at these levels is a reasonable bet for the long term. It's reasonably priced and has more upside potential than downside risk. So the thesis is as simple as it could be.But since we do have to contend with binary headlines this weekend and for the coming weeks, don't take a full position at the same time. It's best to leave room to add in case the rhetoric from the economic war between the U.S. and China worsens.In summary, Nike delivered another strong quarter despite the economic war with China and the movement there to boycott U.S. brands. Management did cite currency headwinds but they still guided well going forward so it's not likely to create more problems. The U.S. Dollar is strong but it should weaken going forward, especially since the U.S. Federal Reserve will be cutting rates this summer.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. Join his live chat room free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 7 Top Small-Cap Stocks Of 2019 * Critical Levels to Watch in 7 Marijuana Stocks * 5 Smaller Cloud Stocks That Have Plenty of Potential Compare Brokers The post Nike Stock Continues to Show Us That It's Still a King appeared first on InvestorPlace.
China is unlikely to surpass the U.S. in retail sales this year as expected due to the damaging effect of the trade conflict but that milestone is likely to happen in 2021.
Shares of Abercrombie & Fitch Co. sank 4.5% in midday trading Tuesday, but CFRA analyst Camilla Yanushevsky reiterated her buy rating, saying investors are missing bullish points, although she cut her price target to $22 from $35. The stock had plunged 50% since closing at a 3-year high of $30.48 on May 3, 2019 to a 1 1/2-year low of $15.23 on June 12, highlighted by the 27% tumble on May 29 after fiscal first-quarter results, in which same-store sales missed expectations. "Initiatives CEO Fran Horowitz [have] taken to integrate inclusivity in brand since her appointment are paying off," Yanushevsky wrote in a note to clients. "In our view, retailers that align mission and product to convince consumer that they're 'inclusive' will flourish, even in the face of secular mall traffic declines." Yanushevsky pointed out that A&F has posted 7-straight quarters of same-store sales growth. That followed six-straight quarters of declines, and 22 quarters of declines over the past 23 quarters. The stock has lost 23% year to date, while the SPDR S&P Retail ETF has gained 1.2% and the S&P 500 has advanced 17%.
Shares of Sally Beauty Holdings Inc. rallied 0.8% in morning trading, to bounce off the previous session's near 9-year low, after Instinet analyst Simeon Siegel said it was uncertain whether Amazon.com Inc.'s launch of its Professional Beauty Store will actually trigger change. The stock had tumbled 16.8% on Monday, the second-biggest one-day drop since it went public in November 2006, to close at the lowest price since November 2010. Siegel said that while Amazon's new beauty store will carry brands including Wella Color, RUSK and OPI Professional, all which are carried on Sally Beauty's website, many of those products are already widely available online, and on Amazon. "That said, beauty has largely been outside of [Amazon's] share grab thus far..., so a decision to make a broader push into the category shouldn't be ignored," Siegel wrote in a note to clients. Meanwhile, Ulta Beauty Inc.'s stock inched up less than 0.1%, after falling 2.6% on Monday after the Amazon news. Sally Beauty's stock has lost 27% year to date and Ulta shares have rallied 42%, while the SPDR S&P Retail ETF has gained 1.5% and the S&P 500 has climbed 17%.