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The holiday season shopping frenzy has started to hit the shops again. However, it’s not only presents that we brainstorm for ahead of Christmas -- zeroing in on a hot spot to celebrate the Christmas weekend also tops many of our last-minute to-do list. If an ardent investor is worried about ignoring his or her portfolio in these merry times, Zacks would like to make investment decisions easier with not one, but five priceless choices. But before jumping to the stocks, let’s look at how the economy has unfolded lately.
Economy So Far
At one end, the Trump Rally is ruling the U.S. stock market, while on the other end the recent hike in the benchmark interest rate by a quarter of a percentage point to 0.5–0.75% is making headlines, signaling that the U.S. economy has stabilized post-Brexit. This sounds good for retailers, who bank on this part of the year for a sizeable chunk of revenues and profits.
The second estimate for GDP shows that the U.S. economy grew 3.2% in the third quarter, faring better than the first estimate of 2.9% growth and the second-quarter anemic increase of 1.4%. Given the rebounding economy, still lower gasoline prices and improving labor market with gradual increase in wages, the retail space is brimming with optimism at the moment.
These factors have given a boost to buyers’ confidence. According to the Conference Board data, the Consumer Confidence Index rose to 107.1 in November from October’s upward revised reading of 100.8, and is at its highest level in nine years. Per the preliminary reading of the University of Michigan, Consumer Sentiment increased to 98 in December from 93.8 in November.
We expect this positive sentiment to propel consumer spending. Consumer spending increased 2.8% during the third quarter. The Commerce Department recently unveiled that consumer spending advanced 0.3% in October. However, soft November retail sales data raised some concerns. The Commerce Department unveiled that the U.S. retail sales in November inched up 0.1% following a 0.6% increase in October. Nevertheless, analysts believe that the economy is well on track and the holiday season is likely to end on a strong note.
The nation's largest retail trade group, National Retail Federation, projects a 3.6% rise in November and December sales (excluding autos, gas and restaurant sales) to $655.8 billion, which is far better than the 10-year average sales growth of 2.5%. Non-store sales for the season are expected to increase 7–10% to approximately $117 billion.
These 5 Picks Are Your Christmas Gifts
With the advent of the holiday season, the retail sector takes the center stage. We have highlighted five Retail/Wholesale stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a VGM Score of “A” or “B.” Not only this, these stocks have outperformed their respective industries.
Investors can count on Best Buy Co., Inc. (BBY - Free Report) , a retailer of technology products, services and solutions. The company posted an average positive earnings surprise of 25.7% in the trailing four quarters and has a long-term earnings growth rate of 11.9%. In the past six months, the stock has surged roughly 54.9% and outperformed the Zacks categorized Retail-Consumer Electronic industry, which gained 42.5%. The stock has a VGM Score of “A” and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Burlington Stores, Inc. (BURL - Free Report) , a retailer of branded apparel products, is a solid bet, with a Zacks Rank #1 and a VGM Score of “B.” The company posted an average positive earnings surprise of 25.6% in the trailing four quarters and has a long-term earnings growth rate of 19.9%. The stock has surged 35.8% in the past six months and comfortably outperformed the Zacks categorized Retail-Discount & Variety industry, which increased only 3.2%.
We suggest investing in Dave & Buster's Entertainment, Inc. (PLAY - Free Report) , which has a long-term earnings growth rate of 17.4% and a VGM Score of “B.” This owner and operator of entertainment and dining venues delivered an average positive earnings surprise of 37.8% in the trailing four quarters and carries a Zacks Rank #1. We note that in the past six months, the stock has advanced approximately 18.8%, while the Zacks categorized Retail-Food & Restaurants industry has shown a marginal increase of 1.7%.
You may also consider Tilly's, Inc. (TLYS - Free Report) , a retailer of casual apparel, footwear, and accessories. The stock sports a Zacks Rank #1 and has a VGM Score of “B.” The company posted an average positive earnings surprise of 98% in the trailing four quarters and has a long-term earnings growth rate of 15.5%. In the past six months, the stock has displayed a fabulous bull run in the index and has risen over 100%, while the Zacks categorized Retail-Apparel/Shoe industry has increased 11.3%.
Last but not least is Papa John's International, Inc. (PZZA - Free Report) , which operates and franchises pizza delivery and carryout restaurants under the Papa Johns trademark. The stock carries a Zacks Rank #2 and has a VGM Score of “B.” The company posted an average positive earnings surprise of 11.3% in the trailing four quarters and has a long-term earnings growth rate of 15.5%. In the past six months, the stock has exhibited a bullish run and surged 34.7%, while the Zacks categorized Retail-Food & Restaurants industry has inched up 1.7%.
The aforementioned stocks hold promise and excellent prospect with healthy fundamentals. We wish the addition of these five stocks turn out a bonanza for you. Merry Christmas!
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>
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5 Retail Stocks to Buy Before Christmas
The holiday season shopping frenzy has started to hit the shops again. However, it’s not only presents that we brainstorm for ahead of Christmas -- zeroing in on a hot spot to celebrate the Christmas weekend also tops many of our last-minute to-do list. If an ardent investor is worried about ignoring his or her portfolio in these merry times, Zacks would like to make investment decisions easier with not one, but five priceless choices. But before jumping to the stocks, let’s look at how the economy has unfolded lately.
Economy So Far
At one end, the Trump Rally is ruling the U.S. stock market, while on the other end the recent hike in the benchmark interest rate by a quarter of a percentage point to 0.5–0.75% is making headlines, signaling that the U.S. economy has stabilized post-Brexit. This sounds good for retailers, who bank on this part of the year for a sizeable chunk of revenues and profits.
The second estimate for GDP shows that the U.S. economy grew 3.2% in the third quarter, faring better than the first estimate of 2.9% growth and the second-quarter anemic increase of 1.4%. Given the rebounding economy, still lower gasoline prices and improving labor market with gradual increase in wages, the retail space is brimming with optimism at the moment.
These factors have given a boost to buyers’ confidence. According to the Conference Board data, the Consumer Confidence Index rose to 107.1 in November from October’s upward revised reading of 100.8, and is at its highest level in nine years. Per the preliminary reading of the University of Michigan, Consumer Sentiment increased to 98 in December from 93.8 in November.
We expect this positive sentiment to propel consumer spending. Consumer spending increased 2.8% during the third quarter. The Commerce Department recently unveiled that consumer spending advanced 0.3% in October. However, soft November retail sales data raised some concerns. The Commerce Department unveiled that the U.S. retail sales in November inched up 0.1% following a 0.6% increase in October. Nevertheless, analysts believe that the economy is well on track and the holiday season is likely to end on a strong note.
The nation's largest retail trade group, National Retail Federation, projects a 3.6% rise in November and December sales (excluding autos, gas and restaurant sales) to $655.8 billion, which is far better than the 10-year average sales growth of 2.5%. Non-store sales for the season are expected to increase 7–10% to approximately $117 billion.
These 5 Picks Are Your Christmas Gifts
With the advent of the holiday season, the retail sector takes the center stage. We have highlighted five Retail/Wholesale stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a VGM Score of “A” or “B.” Not only this, these stocks have outperformed their respective industries.
Investors can count on Best Buy Co., Inc. (BBY - Free Report) , a retailer of technology products, services and solutions. The company posted an average positive earnings surprise of 25.7% in the trailing four quarters and has a long-term earnings growth rate of 11.9%. In the past six months, the stock has surged roughly 54.9% and outperformed the Zacks categorized Retail-Consumer Electronic industry, which gained 42.5%. The stock has a VGM Score of “A” and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Burlington Stores, Inc. (BURL - Free Report) , a retailer of branded apparel products, is a solid bet, with a Zacks Rank #1 and a VGM Score of “B.” The company posted an average positive earnings surprise of 25.6% in the trailing four quarters and has a long-term earnings growth rate of 19.9%. The stock has surged 35.8% in the past six months and comfortably outperformed the Zacks categorized Retail-Discount & Variety industry, which increased only 3.2%.
We suggest investing in Dave & Buster's Entertainment, Inc. (PLAY - Free Report) , which has a long-term earnings growth rate of 17.4% and a VGM Score of “B.” This owner and operator of entertainment and dining venues delivered an average positive earnings surprise of 37.8% in the trailing four quarters and carries a Zacks Rank #1. We note that in the past six months, the stock has advanced approximately 18.8%, while the Zacks categorized Retail-Food & Restaurants industry has shown a marginal increase of 1.7%.
You may also consider Tilly's, Inc. (TLYS - Free Report) , a retailer of casual apparel, footwear, and accessories. The stock sports a Zacks Rank #1 and has a VGM Score of “B.” The company posted an average positive earnings surprise of 98% in the trailing four quarters and has a long-term earnings growth rate of 15.5%. In the past six months, the stock has displayed a fabulous bull run in the index and has risen over 100%, while the Zacks categorized Retail-Apparel/Shoe industry has increased 11.3%.
Last but not least is Papa John's International, Inc. (PZZA - Free Report) , which operates and franchises pizza delivery and carryout restaurants under the Papa Johns trademark. The stock carries a Zacks Rank #2 and has a VGM Score of “B.” The company posted an average positive earnings surprise of 11.3% in the trailing four quarters and has a long-term earnings growth rate of 15.5%. In the past six months, the stock has exhibited a bullish run and surged 34.7%, while the Zacks categorized Retail-Food & Restaurants industry has inched up 1.7%.
The aforementioned stocks hold promise and excellent prospect with healthy fundamentals. We wish the addition of these five stocks turn out a bonanza for you. Merry Christmas!
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>