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Let Your Portfolio Grow in June with These 5 Retail Stocks
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If you wish to relax this June, you can still nourish your portfolio by adding growth stocks. These are generally hot and flourishing stocks with earnings growth potential. The market is on a bull run and we see no reason that the same could be derailed, unless something goes wrong.
So far in the year, the Dow Jones Industrial Average has advanced 7.3%, the S&P 500 has gained 8.9%, while the tech-laden Nasdaq Composite Index has surged 17.1%. As Trump’s friendly fiscal policies take shape, the market could see new highs.
Among the 16 Zacks categorized sectors, we are focusing on Retail-Wholesale today. The sector has gained 15.5% so far in the year and has comfortably outperformed the S&P 500 index. According to the latest Earnings Outlook report, as of May 31, 2017, the sector is expected to record top and bottom-line growth of 4.4% and 3%, respectively, this year. We understand that the space is not fully immune to global uncertainties, which could however limit growth.
Sector’s Correlation with the Economy
The Retail-Wholesale sector has not been an outstanding performer but it still holds some promise, given the favorable economic indicators. The rebound in oil prices from all-time lows, decelerating unemployment rate, and a gradual improvement in the housing market signal that the economy is on a recovery mode.
These factors are playing a crucial role in raising consumers’ confidence. We expect this positive sentiment to translate into higher consumer spending. Consumer spending rose 0.4% in April, following a 0.3% uptick in March.
As per the Commerce Department, sales at U.S. retailers increased 0.4% in April and were 4.5% higher than the year-ago levels. It was the strongest sales gain in three months. March sales were also stronger than originally reported. A monthly decline of 0.2% in March was revised upward to show a 0.1% uptick. Non-store retailers, which include online shopping outlets, saw sales growth of 1.4% in April.
Kiplinger’s latest forecast shows that retail sales, excluding gasoline, are expected to jump 3.8% in 2017. The report further suggests that e-commerce sales are expected to increase 14% this year compared with 13.1% in 2016.
Prominent Picks
With steady job additions, persistently low unemployment and gradual wage acceleration, the background looks promising for consumers. This calls for investing in the retail space. Here we have highlighted five Retail/Wholesale stocks with a favorable combination of a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a Growth 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.
We suggest investing in The Children's Place, Inc. (PLCE - Free Report) , with a long-term earnings growth rate of 8% and a Growth Score of “A.” In the past year, the stock has surged roughly 52.6% and outperformed the Zacks categorized Retail-Apparel/Shoe industry, which declined 16.4%. This specialty retailer of children's apparel delivered an average positive earnings surprise of 36.6% over the trailing four quarters and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Another lucrative option is Best Buy Co., Inc. (BBY - Free Report) , which has a long-term earnings growth rate of 11.8% and a Growth Score of “B.” This retailer of technology products, services, and solutions delivered an average positive earnings surprise of 33.8% in the trailing four quarters and carries a Zacks Rank #1. We note that in the past year, the stock has advanced approximately 90.4%, while the Zacks categorized Retail-Consumer Electronic industry has gained 64.5%.
You may also consider Big 5 Sporting Goods Corporation (BGFV - Free Report) , which operates as a sporting goods retailer. The stock sports a Zacks Rank #1 and has a Growth Score of “A.” The company posted an average positive earnings surprise of 94.5% in the trailing four quarters and has a long-term earnings growth rate of 12%. In the past year, the stock has displayed a fabulous bull run on the index and has risen 60.6%, while the Zacks categorized Retail – Miscellaneous/Diversified industry decreased 5.7%.
Investors can count on Darden Restaurants, Inc. (DRI - Free Report) , an operator of full-service restaurants, with a long-term earnings growth rate of 10.9%. The company posted an average positive earnings surprise of 3.4% over the trailing four quarters and has a Growth Score of “A.” In the past year, this Zacks Rank #2 stock has exhibited a bullish run and surged roughly 35.5%, while the Zacks categorized Retail-Food & Restaurants industry gained 13.8%.
Burlington Stores, Inc. (BURL - Free Report) , a retailer of branded apparel products, with a long-term earnings growth rate of 15.9% is a solid bet. The company posted an average positive earnings surprise of 22.6% over the trailing four quarters and has a Growth Score of “A.” In the past year, this Zacks Rank #2 stock has exhibited a bullish run and surged 59.6%, while the Zacks categorized Retail-Discount & Variety industry gained 2.6%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Let Your Portfolio Grow in June with These 5 Retail Stocks
If you wish to relax this June, you can still nourish your portfolio by adding growth stocks. These are generally hot and flourishing stocks with earnings growth potential. The market is on a bull run and we see no reason that the same could be derailed, unless something goes wrong.
So far in the year, the Dow Jones Industrial Average has advanced 7.3%, the S&P 500 has gained 8.9%, while the tech-laden Nasdaq Composite Index has surged 17.1%. As Trump’s friendly fiscal policies take shape, the market could see new highs.
Among the 16 Zacks categorized sectors, we are focusing on Retail-Wholesale today. The sector has gained 15.5% so far in the year and has comfortably outperformed the S&P 500 index. According to the latest Earnings Outlook report, as of May 31, 2017, the sector is expected to record top and bottom-line growth of 4.4% and 3%, respectively, this year. We understand that the space is not fully immune to global uncertainties, which could however limit growth.
Sector’s Correlation with the Economy
The Retail-Wholesale sector has not been an outstanding performer but it still holds some promise, given the favorable economic indicators. The rebound in oil prices from all-time lows, decelerating unemployment rate, and a gradual improvement in the housing market signal that the economy is on a recovery mode.
These factors are playing a crucial role in raising consumers’ confidence. We expect this positive sentiment to translate into higher consumer spending. Consumer spending rose 0.4% in April, following a 0.3% uptick in March.
As per the Commerce Department, sales at U.S. retailers increased 0.4% in April and were 4.5% higher than the year-ago levels. It was the strongest sales gain in three months. March sales were also stronger than originally reported. A monthly decline of 0.2% in March was revised upward to show a 0.1% uptick. Non-store retailers, which include online shopping outlets, saw sales growth of 1.4% in April.
Kiplinger’s latest forecast shows that retail sales, excluding gasoline, are expected to jump 3.8% in 2017. The report further suggests that e-commerce sales are expected to increase 14% this year compared with 13.1% in 2016.
Prominent Picks
With steady job additions, persistently low unemployment and gradual wage acceleration, the background looks promising for consumers. This calls for investing in the retail space. Here we have highlighted five Retail/Wholesale stocks with a favorable combination of a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a Growth 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.
We suggest investing in The Children's Place, Inc. (PLCE - Free Report) , with a long-term earnings growth rate of 8% and a Growth Score of “A.” In the past year, the stock has surged roughly 52.6% and outperformed the Zacks categorized Retail-Apparel/Shoe industry, which declined 16.4%. This specialty retailer of children's apparel delivered an average positive earnings surprise of 36.6% over the trailing four quarters and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Another lucrative option is Best Buy Co., Inc. (BBY - Free Report) , which has a long-term earnings growth rate of 11.8% and a Growth Score of “B.” This retailer of technology products, services, and solutions delivered an average positive earnings surprise of 33.8% in the trailing four quarters and carries a Zacks Rank #1. We note that in the past year, the stock has advanced approximately 90.4%, while the Zacks categorized Retail-Consumer Electronic industry has gained 64.5%.
You may also consider Big 5 Sporting Goods Corporation (BGFV - Free Report) , which operates as a sporting goods retailer. The stock sports a Zacks Rank #1 and has a Growth Score of “A.” The company posted an average positive earnings surprise of 94.5% in the trailing four quarters and has a long-term earnings growth rate of 12%. In the past year, the stock has displayed a fabulous bull run on the index and has risen 60.6%, while the Zacks categorized Retail – Miscellaneous/Diversified industry decreased 5.7%.
Investors can count on Darden Restaurants, Inc. (DRI - Free Report) , an operator of full-service restaurants, with a long-term earnings growth rate of 10.9%. The company posted an average positive earnings surprise of 3.4% over the trailing four quarters and has a Growth Score of “A.” In the past year, this Zacks Rank #2 stock has exhibited a bullish run and surged roughly 35.5%, while the Zacks categorized Retail-Food & Restaurants industry gained 13.8%.
Burlington Stores, Inc. (BURL - Free Report) , a retailer of branded apparel products, with a long-term earnings growth rate of 15.9% is a solid bet. The company posted an average positive earnings surprise of 22.6% over the trailing four quarters and has a Growth Score of “A.” In the past year, this Zacks Rank #2 stock has exhibited a bullish run and surged 59.6%, while the Zacks categorized Retail-Discount & Variety industry gained 2.6%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>