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5 Retail Growth Stocks to Fetch You Higher Returns
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Betting on a stock is always focused on trying to hit the jackpot. But striking the right chord each time needs a fair amount of luck. So, how to play it out? Do not be a mute spectator and wait for a convincing economic environment; instead be a front-runner by identifying stocks that have the potential to outperform even when market conditions are not congenial. Target “Growth Stocks”. These are generally hot and flourishing stocks with earnings growth potential.
Retail Sector Holds the Baton
With an expected rebound in the economy, the retail space is bubbling with optimism. After navigating brazenly through the rough tide due to the sluggishness witnessed in emerging markets such as China and Brazil, and fears of challenging economic/political conditions in Europe post Brexit, the U.S. economy looks much steady now. A clear answer to this was the GDP growth of 1.1% registered in the second quarter of 2016, albeit a tad lower than the initial estimate of 1.2%, but better than a 0.8% increase recorded in the first quarter.
Investors’ enthusiasm is further compounded by increased consumer confidence, which improved significantly in August. According to the Conference Board data, the Consumer Confidence Index rose to 101.1 in August from the July reading of 96.7, and is at its 11-month high. Industry pundits believe that a rosy job picture, improvement in the housing market and higher income prospects may have boosted consumer sentiment.
Per the Labor Department, the economy added 151,000 jobs in August. Although not spectacular, this is an evidence of growth. Additionally, we note that the unemployment rate is hovering around 4.9%.
Given an improving labor market and the gradual rise in wages, we expect consumer spending – which accounts for over two-thirds of the U.S. economic activity – to improve. Consumer spending increased 4.4% in the second quarter from the previous estimate of 4.2%. This is the fastest pace of expansion the metric has experienced in nearly two years. The Commerce Department recently unveiled that consumer spending rose 0.3% in July, after advancing 0.5% in June.
From the above discussion it is quite apparent that the retail sector holds the baton, and adding a few stocks from the space would be a prudent decision. These stocks are backed by sound fundamentals, surging share price and a track record of better-than-expected results.
5 Prominent Picks
We have identified 5 Retail-Wholesale Stocks based on a favorable combination of a Zacks Rank #1 (Strong Buy) or 2 (Buy), and a Growth Style Score of “A” or “B”.
We suggest investing in The Children's Place, Inc. (PLCE - Free Report) , with a Zacks Rank #1, long-term earnings growth rate of 10.3% and a Growth Score of “A”. This specialty retailer of children's apparel delivered an average positive earnings surprise of 33.1% over the trailing four quarters. It is expected to witness earnings growth of 30.4% in fiscal 2016 and 10.6% in fiscal 2017. The Zacks Consensus Estimate too has been on the rise over the past 30 days. The stock has soared about 50.5% year to date.
Investors can count on Urban Outfitters Inc. (URBN - Free Report) , a lifestyle specialty retail company that sports a Zacks Rank #1 with a long-term earnings growth rate of 15%. The company delivered an average positive earnings surprise of 6.7% over the trailing four quarters and has a Growth Score of “B”. It is expected to witness earnings growth of 16.1% in fiscal 2017 and 9.1% in fiscal 2018. The Zacks Consensus Estimate has moved north over the past 30 days. Also, the stock has surged 54.7% so far this year.
Burlington Stores, Inc. (BURL - Free Report) , retailer of branded apparel products, is a solid bet, with a Zacks Rank #2 and a Growth Score of “A”. The company delivered an average positive earnings surprise of 16.1% over the trailing four quarters and has a long-term earnings growth rate of 18.4%. It is expected to witness earnings growth of 29% in fiscal 2016 and 17.1% in fiscal 2017. The Zacks Consensus Estimate too has been trending up over the past 30 days. The company has witnessed a massive run in the stock market, with its share price up 95.2% so far this year.
Another stock that investors may consider is Fortune Brands Home & Security, Inc. with a Zacks Rank #2, a long-term earnings growth rate of 17.5% and a Growth Score of “A”. The company delivered an average positive earnings surprise of 7% over the trailing four quarters. It is expected to witness earnings growth of 32.1% in 2016 and 10.7% in 2017. The Zacks Consensus Estimate too has been on the rise over the past 60 days. Shares of this provider of home and security products have advanced 13.5% in the past one month.
Last but not the least is Papa John's International Inc. (PZZA - Free Report) , with a Zacks Rank #2, long-term earnings growth rate of 15.5% and a Growth Score of “A”. The company, which operates and franchises pizza delivery and carryout restaurants under the Papa Johns trademark, delivered an average positive earnings surprise of 7.8% over the trailing four quarters. It is expected to witness solid earnings growth of 17.4% in 2016 and 11.4% in 2017. The Zacks Consensus Estimate too has been on the rise over the past 60 days. The stock has surged roughly 36% year to date.
Endnote
While these five stocks are not the end of the road, with the help of the Zacks Stock Screener and permutation and combination, you can find out stocks that have the potential to beat the market.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>
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5 Retail Growth Stocks to Fetch You Higher Returns
Betting on a stock is always focused on trying to hit the jackpot. But striking the right chord each time needs a fair amount of luck. So, how to play it out? Do not be a mute spectator and wait for a convincing economic environment; instead be a front-runner by identifying stocks that have the potential to outperform even when market conditions are not congenial. Target “Growth Stocks”. These are generally hot and flourishing stocks with earnings growth potential.
Retail Sector Holds the Baton
With an expected rebound in the economy, the retail space is bubbling with optimism. After navigating brazenly through the rough tide due to the sluggishness witnessed in emerging markets such as China and Brazil, and fears of challenging economic/political conditions in Europe post Brexit, the U.S. economy looks much steady now. A clear answer to this was the GDP growth of 1.1% registered in the second quarter of 2016, albeit a tad lower than the initial estimate of 1.2%, but better than a 0.8% increase recorded in the first quarter.
Investors’ enthusiasm is further compounded by increased consumer confidence, which improved significantly in August. According to the Conference Board data, the Consumer Confidence Index rose to 101.1 in August from the July reading of 96.7, and is at its 11-month high. Industry pundits believe that a rosy job picture, improvement in the housing market and higher income prospects may have boosted consumer sentiment.
Per the Labor Department, the economy added 151,000 jobs in August. Although not spectacular, this is an evidence of growth. Additionally, we note that the unemployment rate is hovering around 4.9%.
Given an improving labor market and the gradual rise in wages, we expect consumer spending – which accounts for over two-thirds of the U.S. economic activity – to improve. Consumer spending increased 4.4% in the second quarter from the previous estimate of 4.2%. This is the fastest pace of expansion the metric has experienced in nearly two years. The Commerce Department recently unveiled that consumer spending rose 0.3% in July, after advancing 0.5% in June.
From the above discussion it is quite apparent that the retail sector holds the baton, and adding a few stocks from the space would be a prudent decision. These stocks are backed by sound fundamentals, surging share price and a track record of better-than-expected results.
5 Prominent Picks
We have identified 5 Retail-Wholesale Stocks based on a favorable combination of a Zacks Rank #1 (Strong Buy) or 2 (Buy), and a Growth Style Score of “A” or “B”.
We suggest investing in The Children's Place, Inc. (PLCE - Free Report) , with a Zacks Rank #1, long-term earnings growth rate of 10.3% and a Growth Score of “A”. This specialty retailer of children's apparel delivered an average positive earnings surprise of 33.1% over the trailing four quarters. It is expected to witness earnings growth of 30.4% in fiscal 2016 and 10.6% in fiscal 2017. The Zacks Consensus Estimate too has been on the rise over the past 30 days. The stock has soared about 50.5% year to date.
Investors can count on Urban Outfitters Inc. (URBN - Free Report) , a lifestyle specialty retail company that sports a Zacks Rank #1 with a long-term earnings growth rate of 15%. The company delivered an average positive earnings surprise of 6.7% over the trailing four quarters and has a Growth Score of “B”. It is expected to witness earnings growth of 16.1% in fiscal 2017 and 9.1% in fiscal 2018. The Zacks Consensus Estimate has moved north over the past 30 days. Also, the stock has surged 54.7% so far this year.
Burlington Stores, Inc. (BURL - Free Report) , retailer of branded apparel products, is a solid bet, with a Zacks Rank #2 and a Growth Score of “A”. The company delivered an average positive earnings surprise of 16.1% over the trailing four quarters and has a long-term earnings growth rate of 18.4%. It is expected to witness earnings growth of 29% in fiscal 2016 and 17.1% in fiscal 2017. The Zacks Consensus Estimate too has been trending up over the past 30 days. The company has witnessed a massive run in the stock market, with its share price up 95.2% so far this year.
Another stock that investors may consider is Fortune Brands Home & Security, Inc. with a Zacks Rank #2, a long-term earnings growth rate of 17.5% and a Growth Score of “A”. The company delivered an average positive earnings surprise of 7% over the trailing four quarters. It is expected to witness earnings growth of 32.1% in 2016 and 10.7% in 2017. The Zacks Consensus Estimate too has been on the rise over the past 60 days. Shares of this provider of home and security products have advanced 13.5% in the past one month.
Last but not the least is Papa John's International Inc. (PZZA - Free Report) , with a Zacks Rank #2, long-term earnings growth rate of 15.5% and a Growth Score of “A”. The company, which operates and franchises pizza delivery and carryout restaurants under the Papa Johns trademark, delivered an average positive earnings surprise of 7.8% over the trailing four quarters. It is expected to witness solid earnings growth of 17.4% in 2016 and 11.4% in 2017. The Zacks Consensus Estimate too has been on the rise over the past 60 days. The stock has surged roughly 36% year to date.
Endnote
While these five stocks are not the end of the road, with the help of the Zacks Stock Screener and permutation and combination, you can find out stocks that have the potential to beat the market.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>