Wednesday, November 13, 2013

5 Retail stocks that may benefit significantly from the holiday season this year

I've never been a big fan of retail stocks and therefore I don't hold any positions in retail stocks at the moment. But the holiday shopping season is coming up and there are certainly a few contenders! This week I'm going to add a few stocks in the retail sector to my portfolio! Here are the stocks that may have a good chance to increase their earnings this year based on past performance and sector analysis, this analysis is also based on the 52 week trading range, all the stocks mentioned below are trading at their high's of the year.



#1 GAMESTOP ($GME)



Gamestop can expect a huge boost in their sales (and already has with the pre-orders), thanks to the upcoming next generation consoles; Microsoft's Xbox One and Sony's Playstation 4, along with their next gen games. You may wonder if Gamestop's stock is already overbought, I don't think this is the case since its price is pretty steady over the last couple of months.

#2 JC PENNEY ($JCP)



Who would've thought I'd actually mention JC Penny on my site? Me, the anti- retail trader! But here it is; JCP is on my list. JC Penney had a tough year. However, I do think JC Penney is incredibly cheap right now due to the 'misfortunes', and may certainly benefit from the upcoming shopping season. I think its dark days are over and it's time to look ahead when it comes to this company. Similar stores like Macy's ($M), Sears ($SHLD),  Kohl's ($KSS) and Nordstrom ($JWN) all trade well in the $40 - $60 range, I just don't think JCP will stay behind for very much longer, especially after their make-over. Very bullish on JCP.

#3 AMAZON ($AMZN)



Though pretty pricey compared to the latter mentioned stocks, this giant online retailer has great potential. Now with Sunday deliveries? Brilliant! Amazon is by far the best known and biggest online retailer in the US, and will certainly benefit from the holiday season this year, like it pretty much did every year. Not only black Friday sales will benefit this company, but also Cyber Monday sales, which is the 'online version' of Black Friday. The question may be if this stock is already overvalued, but if you look at the 52 week price range ($21- $368) you'll notice that it's about to break out to new levels! If Amazon is not in your price range, here's another one for you:

#4 WAL-MART ($WMT)


This is another stock I thought I would never mention on my site. By the way, did Walmart just kill Thanksgiving by opening ON Thanksgiving at 6 pm - well AHEAD of black Friday? As Sarah Palin would say: "you betcha!". Good move? They'll certainly rake in sales that's for sure. And the money that's spent at Wal-Mart can't be spent anywhere else (probably Wal-Mart's theory). This is also the reason why I put this company on the list. In this economic recovery climate, many people are still relying on their holiday shopping at Wal-Mart.

# 5 BEST BUY ($BBY)


Last, but not least, Best Buy ($BBY), due to the new influx of hot, well in demand electronics on the market, Best Buy has all the reason to add a few extra bucks to its next earnings report. Best Buy is certainly very competitive, and positions themselves pretty well in the market. Looking at the 52 week range numbers ($11.20 / $44.50) one can see that Best Buy is also trading near its high for the year. The sales numbers are certainly promising!

Conclusion:

I believe this shopping season is going to be huge! Consumer confidence is up, new products are launched and the overall markets are pretty stable. Not to mention that oil prices are down, which also reflects at the pump. Money that people don't spend on gas, is pumped back into the economy. Out of the five mentioned above; JCP is probably my biggest contender since it's very cheap right now compared to its competitors and they have a hug growth potential. As the other stocks are concerned; again, pay attention to the 52 high/low range, you'll notice that all the stocks are trading near their highest levels, which is an indication that a break-out may be in sight. 

-John



Disclaimer:

All opinions expressed, trade recommendations/advice on this website are solely of John van der Munnik and are not affiliated with any investment firm or any other organization. You should not make an investment only based using this website VDM Trading for your trading needs without seeking help from your own financial advisor.