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These 5 Retail Stocks Look Great Investment Options for April
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While coronavirus-inflicted challenges persist, a constructive economic policy is playing a key role in steering the market for now. The two-pronged approach of massive coronavirus stimulus package and mass vaccination is stoking economic growth. As and when business organizations and industries start to operate at an optimum level, this will potentially ramp up hiring activity, and in turn consumer spending, thereby contributing to GDP.
Markedly, the Federal Reserve raised its 2021 real GDP forecast to 6.5% from 4.2%. The Jerome Powell-led Fed now envisions unemployment rate to be 4.5% in 2021, down from the current level of 6.2% and the prior projection of 5%. We believe that still-low interest rate environment, swift vaccination and direct payments to individuals as well as financial assistance to businesses will act as tailwinds.
Undeniably, Americans look way more confident now regarding the labor market and the overall economic environment. Per the Conference Board, the Consumer Confidence Index increased to 109.7 in March from February’s revised reading of 90.4. The index surged to its highest mark since the pandemic struck the economy in March last year.
Lynn Franco, senior director of economic indicators at The Conference Board said, “Consumers’ assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months. Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items.”
Meanwhile, the passing of a coronavirus relief package worth $1.9 trillion that entitles eligible Americans to $1,400 stimulus checks is likely to trigger spending across the board. Clearly, demand will not be restricted to a few categories as was noticed when the coronavirus crisis crippled the economy. Relaxation in the pandemic-induced restrictions, thanks to a rapid inoculation drive and the return to active social lifestyle, events and occasions are likely to spur demand for traditional categories.
L Brands, Inc.’s sustained focus on cost containment, inventory management, merchandise and speed-to-market initiatives makes it a potential pick. Notably, the company continues to revamp its business by improving store experience, localizing assortments and enhancing its direct business. The company recently raised earnings view for first-quarter fiscal 2021 due to improved sales trends. Incidentally, the company now envisions earnings between 85 cents and $1.00 per share for the first quarter, up from the earlier-guided band of 55-65 cents. The stock has a Zacks Rank #1 and a VGM Score of A. This specialty retailer of women’s intimate and other apparel, beauty, and personal care products has a trailing four-quarter earnings surprise of 479.7%, on average. It has a long-term earnings growth rate of 13%. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings indicates an improvement of 15.3% and 35.6%, respectively, from the year-ago period.
Five Below, Inc. (FIVE - Free Report) is worth betting on. The company’s focus on providing trend-right products, improving supply chain, strengthening digital capabilities and delivering better WOW products bode well. The company’s business model, financial strength and store growth opportunities make us optimistic. The stock currently has a Zacks Rank #2 and a VGM Score of B. This extreme-value retailer for tweens and teens has a trailing four-quarter earnings surprise of 47.7%, on average. It has a long-term earnings growth rate of 32.8%. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 34% and 96.7%, respectively, from the year-ago period.
You may invest in Boot Barn Holdings, Inc. (BOOT - Free Report) , which has a Zacks Rank #2 and a VGM Score of B. This lifestyle retailer of western and work-related footwear, apparel and accessories has been successfully navigating through the challenging environment, courtesy of merchandising strategies, omni-channel capabilities and better expense management. Impressively, the company has a trailing four-quarter earnings surprise of 23.1%, on average. The company has an estimated long-term earnings growth rate of 20%. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings indicates growth of 2.1% and 3.2%, respectively, from the prior-year period.
Investors can also count on MarineMax, Inc. (HZO - Free Report) . The company’s strategic investments in high-margin businesses such as finance, insurance, brokerage, marina and service operations bode well. Markedly, the acquisitions of Northrop & Johnson in July 2020 and Fraser Yachts in 2019 strengthened its position in the superyacht category. In October last year, the company announced the acquisition of SkipperBud’s and its affiliate, Silver Seas Yachts. The buyout meaningfully enhances MarineMax’s presence in the Great Lakes region and the West Coast of the United States. Impressively, this recreational boat and yacht retailer has a trailing four-quarter earnings surprise of 99.9%, on average. The stock has a Zacks Rank #2 and a VGM Score of A. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 25.5% and 26.3%, respectively, from the year-ago period.
Tapestry, Inc. (TPR - Free Report) is also a solid bet. This provider of luxury accessories and branded lifestyle products is poised to benefit from its Acceleration Program aimed at transforming into a leaner and more responsive organization as well as building significant data and analytics capabilities with focus on enhancing digital and omnichannel capabilities. Notably, the company’s compelling pricing strategy, smaller format locations and cost-effective global sourcing model have been contributing to store productivity. These strategies should help drive sales and margins. Impressively, Tapestry has a trailing four-quarter earnings surprise of 39.5%, on average. This Zacks Rank #2 company has an estimated long-term earnings growth rate of 10% and a VGM Score of B. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings indicates growth of 9.6% and 162.9%, respectively, from the prior-year period.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
These 5 Retail Stocks Look Great Investment Options for April
While coronavirus-inflicted challenges persist, a constructive economic policy is playing a key role in steering the market for now. The two-pronged approach of massive coronavirus stimulus package and mass vaccination is stoking economic growth. As and when business organizations and industries start to operate at an optimum level, this will potentially ramp up hiring activity, and in turn consumer spending, thereby contributing to GDP.
Markedly, the Federal Reserve raised its 2021 real GDP forecast to 6.5% from 4.2%. The Jerome Powell-led Fed now envisions unemployment rate to be 4.5% in 2021, down from the current level of 6.2% and the prior projection of 5%. We believe that still-low interest rate environment, swift vaccination and direct payments to individuals as well as financial assistance to businesses will act as tailwinds.
Undeniably, Americans look way more confident now regarding the labor market and the overall economic environment. Per the Conference Board, the Consumer Confidence Index increased to 109.7 in March from February’s revised reading of 90.4. The index surged to its highest mark since the pandemic struck the economy in March last year.
Lynn Franco, senior director of economic indicators at The Conference Board said, “Consumers’ assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months. Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items.”
Meanwhile, the passing of a coronavirus relief package worth $1.9 trillion that entitles eligible Americans to $1,400 stimulus checks is likely to trigger spending across the board. Clearly, demand will not be restricted to a few categories as was noticed when the coronavirus crisis crippled the economy. Relaxation in the pandemic-induced restrictions, thanks to a rapid inoculation drive and the return to active social lifestyle, events and occasions are likely to spur demand for traditional categories.
That said, here we have highlighted five stocks from Retail-Wholesale sector that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance in the Past Six Months
5 Prominent Picks
L Brands, Inc.’s sustained focus on cost containment, inventory management, merchandise and speed-to-market initiatives makes it a potential pick. Notably, the company continues to revamp its business by improving store experience, localizing assortments and enhancing its direct business. The company recently raised earnings view for first-quarter fiscal 2021 due to improved sales trends. Incidentally, the company now envisions earnings between 85 cents and $1.00 per share for the first quarter, up from the earlier-guided band of 55-65 cents. The stock has a Zacks Rank #1 and a VGM Score of A. This specialty retailer of women’s intimate and other apparel, beauty, and personal care products has a trailing four-quarter earnings surprise of 479.7%, on average. It has a long-term earnings growth rate of 13%. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings indicates an improvement of 15.3% and 35.6%, respectively, from the year-ago period.
Five Below, Inc. (FIVE - Free Report) is worth betting on. The company’s focus on providing trend-right products, improving supply chain, strengthening digital capabilities and delivering better WOW products bode well. The company’s business model, financial strength and store growth opportunities make us optimistic. The stock currently has a Zacks Rank #2 and a VGM Score of B. This extreme-value retailer for tweens and teens has a trailing four-quarter earnings surprise of 47.7%, on average. It has a long-term earnings growth rate of 32.8%. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 34% and 96.7%, respectively, from the year-ago period.
You may invest in Boot Barn Holdings, Inc. (BOOT - Free Report) , which has a Zacks Rank #2 and a VGM Score of B. This lifestyle retailer of western and work-related footwear, apparel and accessories has been successfully navigating through the challenging environment, courtesy of merchandising strategies, omni-channel capabilities and better expense management. Impressively, the company has a trailing four-quarter earnings surprise of 23.1%, on average. The company has an estimated long-term earnings growth rate of 20%. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings indicates growth of 2.1% and 3.2%, respectively, from the prior-year period.
Investors can also count on MarineMax, Inc. (HZO - Free Report) . The company’s strategic investments in high-margin businesses such as finance, insurance, brokerage, marina and service operations bode well. Markedly, the acquisitions of Northrop & Johnson in July 2020 and Fraser Yachts in 2019 strengthened its position in the superyacht category. In October last year, the company announced the acquisition of SkipperBud’s and its affiliate, Silver Seas Yachts. The buyout meaningfully enhances MarineMax’s presence in the Great Lakes region and the West Coast of the United States. Impressively, this recreational boat and yacht retailer has a trailing four-quarter earnings surprise of 99.9%, on average. The stock has a Zacks Rank #2 and a VGM Score of A. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 25.5% and 26.3%, respectively, from the year-ago period.
Tapestry, Inc. (TPR - Free Report) is also a solid bet. This provider of luxury accessories and branded lifestyle products is poised to benefit from its Acceleration Program aimed at transforming into a leaner and more responsive organization as well as building significant data and analytics capabilities with focus on enhancing digital and omnichannel capabilities. Notably, the company’s compelling pricing strategy, smaller format locations and cost-effective global sourcing model have been contributing to store productivity. These strategies should help drive sales and margins. Impressively, Tapestry has a trailing four-quarter earnings surprise of 39.5%, on average. This Zacks Rank #2 company has an estimated long-term earnings growth rate of 10% and a VGM Score of B. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings indicates growth of 9.6% and 162.9%, respectively, from the prior-year period.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>