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4 Retail Growth Stocks to Fetch Higher Returns in 2017
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It’s the first trading day of 2017 and the wolves of Wall Street are back again for stock market race. And if morning shows the day, today’s session might show the direction that the market will choose for itself this year. Though it’s not easy to predict the outcome, what’s visible is that the economy now looks well placed on the growth trajectory after a roller coaster ride since the start of 2016.
Slowdown in China, the Brexit storm and other issues did not derail the recovery in the economy. Further, a steady rise in oil prices, improving labor market and inflation edging toward the desired 2% target, provided enough room for the rate hike. Major indices also regained their footing and reached new highs. The S&P 500, NASDAQ Composite and Dow Jones Industrial Average rose nearly 11.2%, 9.8% and 15.2%, respectively, in the past one year.
So what’s next? Can we expect this uptrend to continue in 2017, or will there be deep sell-offs in January like in the past two years? Well, for obvious reasons – mostly election-related – the good times are expected to last. The promise of corporate tax reform, deregulation, repatriation of corporate funds into the U.S. and the possibility of debt-fueled infrastructure spending under the Trump administration with no obvious gridlock in Congress, indicate fewer potholes for the domestic economy in the New Year.
Where to Focus?
To stay ahead of the curve, we need to pick stocks with strong growth potential. Target “Growth Stocks.” These are generally hot and flourishing stocks with earnings growth potential.
Among the 16 Zacks categorized sectors, we are focusing on Retail-Wholesale today. Although, the sector has not lived up to expectations and witnessed meager growth of 4.1% in 2016 compared with the S&P 500, it still holds promise, given the favorable economic indicators. Moreover, friendlier fiscal and regulatory policies from the incoming administration also bode well for the sector.
The recent rebound in oil prices, encouraging employment picture, along with a gradual improvement in the manufacturing sector and housing market signal that the economy is on a recovery mode. Amid such a backdrop, the retail sector presents itself as a lucrative investment hub. These factors are playing a crucial role in raising buyers’ confidence, and we expect this positive sentiment to translate into higher consumer spending.
We have identified four Retail-Wholesale Stocks based on a favorable combination of a Zacks Rank #1 (Strong Buy) and a Growth Style Score of “A” or “B.” These stocks are backed by sound fundamentals, surging share price and a track record of better-than-expected results. Not only this, these stocks have outperformed their respective industries.
4 Prominent Picks
We suggest investing in The Children's Place, Inc. (PLCE - Free Report) , a specialty retailer of children's apparel, with a Growth Score of “B” and long-term earnings growth rate of 10.3%. The company posted an average positive earnings surprise of 36.3% in the trailing four quarters and has estimated earnings per share growth rate of 40.6% and 13.5% for fiscal 2016 and 2017, respectively.
Burlington Stores, Inc. (BURL - Free Report) , a retailer of branded apparel products, is a solid bet, with a Zacks Rank #1 and a Growth Score of “A.” 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 company is expected to witness earnings growth of 37.6% in fiscal 2016 and 16.8% in fiscal 2017. The stock is up 26.4% in the past six months and has comfortably outperformed the Zacks categorized Retail-Discount & Variety industry, which declined 1.1%.
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 Growth 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.
Moreover, the stock has estimated earnings per share growth rate of 35% and 15% for fiscal 2016 and 2017, respectively. We note that in the past six months, the stock has advanced approximately 21.6%, while the Zacks categorized Retail-Food & Restaurants industry has declined 0.4%.
You can also count on Big 5 Sporting Goods Corporation (BGFV - Free Report) , a sporting goods retailer, with a Zacks Rank #1 and a Growth Score of “A.” The stock has a long-term earnings growth rate of 12% with estimated earnings per share growth rate of 3.9% for 2016 and 18.3% for 2017. In the past six months, the stock has exhibited a bullish run and surged 86.2%, while the Zacks categorized Retail-Miscellaneous/Diversified industry declined 1.8%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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4 Retail Growth Stocks to Fetch Higher Returns in 2017
It’s the first trading day of 2017 and the wolves of Wall Street are back again for stock market race. And if morning shows the day, today’s session might show the direction that the market will choose for itself this year. Though it’s not easy to predict the outcome, what’s visible is that the economy now looks well placed on the growth trajectory after a roller coaster ride since the start of 2016.
Slowdown in China, the Brexit storm and other issues did not derail the recovery in the economy. Further, a steady rise in oil prices, improving labor market and inflation edging toward the desired 2% target, provided enough room for the rate hike. Major indices also regained their footing and reached new highs. The S&P 500, NASDAQ Composite and Dow Jones Industrial Average rose nearly 11.2%, 9.8% and 15.2%, respectively, in the past one year.
So what’s next? Can we expect this uptrend to continue in 2017, or will there be deep sell-offs in January like in the past two years? Well, for obvious reasons – mostly election-related – the good times are expected to last. The promise of corporate tax reform, deregulation, repatriation of corporate funds into the U.S. and the possibility of debt-fueled infrastructure spending under the Trump administration with no obvious gridlock in Congress, indicate fewer potholes for the domestic economy in the New Year.
Where to Focus?
To stay ahead of the curve, we need to pick stocks with strong growth potential. Target “Growth Stocks.” These are generally hot and flourishing stocks with earnings growth potential.
Among the 16 Zacks categorized sectors, we are focusing on Retail-Wholesale today. Although, the sector has not lived up to expectations and witnessed meager growth of 4.1% in 2016 compared with the S&P 500, it still holds promise, given the favorable economic indicators. Moreover, friendlier fiscal and regulatory policies from the incoming administration also bode well for the sector.
The recent rebound in oil prices, encouraging employment picture, along with a gradual improvement in the manufacturing sector and housing market signal that the economy is on a recovery mode. Amid such a backdrop, the retail sector presents itself as a lucrative investment hub. These factors are playing a crucial role in raising buyers’ confidence, and we expect this positive sentiment to translate into higher consumer spending.
We have identified four Retail-Wholesale Stocks based on a favorable combination of a Zacks Rank #1 (Strong Buy) and a Growth Style Score of “A” or “B.” These stocks are backed by sound fundamentals, surging share price and a track record of better-than-expected results. Not only this, these stocks have outperformed their respective industries.
4 Prominent Picks
We suggest investing in The Children's Place, Inc. (PLCE - Free Report) , a specialty retailer of children's apparel, with a Growth Score of “B” and long-term earnings growth rate of 10.3%. The company posted an average positive earnings surprise of 36.3% in the trailing four quarters and has estimated earnings per share growth rate of 40.6% and 13.5% for fiscal 2016 and 2017, respectively.
In the past six months, the stock has surged roughly 27% and outperformed the Zacks categorized Retail-Apparel/Shoe industry, which gained 4.4%. Moreover, it sports 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 Growth Score of “A.” 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 company is expected to witness earnings growth of 37.6% in fiscal 2016 and 16.8% in fiscal 2017. The stock is up 26.4% in the past six months and has comfortably outperformed the Zacks categorized Retail-Discount & Variety industry, which declined 1.1%.
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 Growth 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.
Moreover, the stock has estimated earnings per share growth rate of 35% and 15% for fiscal 2016 and 2017, respectively. We note that in the past six months, the stock has advanced approximately 21.6%, while the Zacks categorized Retail-Food & Restaurants industry has declined 0.4%.
You can also count on Big 5 Sporting Goods Corporation (BGFV - Free Report) , a sporting goods retailer, with a Zacks Rank #1 and a Growth Score of “A.” The stock has a long-term earnings growth rate of 12% with estimated earnings per share growth rate of 3.9% for 2016 and 18.3% for 2017. In the past six months, the stock has exhibited a bullish run and surged 86.2%, while the Zacks categorized Retail-Miscellaneous/Diversified industry declined 1.8%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>