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Holiday Sales At 6-Year High: Best Consumer ETFs & Stocks

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This holiday season is the best in six years, reversing all the woes in the retail sector stemming from thousands of store closings and a large number of bankruptcies. This is especially true as sales (excluding automobile) climbed 4.9% between Nov 1 and Dec 24, representing the fastest growth since 2011, according to Mastercard's SpendingPulse report. Notably, online sales rose 18.1%.

Shoppers spent a record more than $800 billion during the holiday season boosted by growing consumer confidence, rising employment and early discounts. Electronics and appliances topped the shopping list with 7.5% growth – the strongest in 10 years. This was followed by sales increase of 5.9% for jewelry and 5.1% for home furnishings and home improvement. Per another firm Customer Growth Partners, shoppers spent $598 billion from the start of the holiday season to Christmas Eve, up from $565 billion for the same period last year.

Holiday sales growth is much better than what the National Retail Federation (NRF) had predicted. For the November-December period, NRF had projected holiday sales (excluding autos) to grow as much as 4%, and online sales to grow 11-15% (read: Should You Buy Retail ETFs Now?).

The biggest winner seems to be (AMZN - Free Report) according to a Reuters/Ipsos opinion poll conducted this month. The e-commerce giant had its biggest holiday season with more than 4 million people opting the Amazon Prime trial for one week during the period.

A robust holiday season drove up many corners of the consumer space including the e-commerce, giving a boost to many stocks and ETFs in the final quarter of 2017. Below, we have highlighted four stocks & ETFs that are leading the space this holiday season.

ETF Corner

VanEck Vectors Retail ETF RTH

This fund provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index. It is highly concentrated on the top firm Amazon at 18.1% while other firms hold no more than 7.6% share. The product has amassed $61.9 million in its asset base and trades in a light average daily volume of 13,000 shares. It charges 35 bps in annual fees and has gained 12.1% since the start of November. RTH has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Putting Up the Tree with Top ETFs of 2017).
Amplify Online Retail ETF IBUY

This ETF has attracted $180.5 million in its asset base. It offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. The fund is home to 39 stocks that are widely diversified, with each holding no more than 5.27% of assets. The product charges 65 bps in fees per year and gained 10.2% in the same time frame.

iShares Edge MSCI Multifactor Consumer Discretionary ETF CNDF

This ETF targets companies that have the potential to outperform the broad U.S. consumer discretionary sector and tracks the MSCI USA Consumer Discretionary Diversified Multiple-Factor Capped Index. Holding 44 stocks in its basket, it is concentrated on Amazon at 13.7% of the portfolio while others hold no more than 5.22% of assets. The fund has accumulated just $3.1 million in its asset base and trades in a meager volume of under 500 shares. CNDF charges 35 bps in fees per year and gained 10.8% during the holiday season. It has a Zacks ETF Rank #2 (Buy).

S&P SmallCap Consumer Discretionary Portfolio PSCD

The fund targets the broad consumer discretionary space by tracking the S&P SmallCap 600 Capped Consumer Discretionary Index. It holds 109 securities in its basket with none accounting for more than 3% of the assets. The product has attracted $73.7 million in AUM while sees a paltry volume of 4,000 shares per day. The ETF charges 29 bps in annual fees and surged 11% since the start of November. It has a Zacks Rank #2 with a High risk outlook (read: 5 Hot ETF Deals for the Holiday Season).

Stock Corner

Boot Barn Holdings Inc. BOOT

This California-based company operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. Its earnings estimate has risen by a couple of cents over the past two months for the holiday quarter, representing year-over-year growth of 10.8%. The stock surged about 114.5% since the start of the holiday season and has a Zacks Rank #2 (read: Retail ETF Rise Ahead of a Robust Holiday Season).

Vera Bradley Inc. VRA

This Indiana-based company is a designer, producer, marketer and retailer of accessories for women. Its earnings estimate revision has moved up by couple of cents over the past two months for the holiday quarter, representing year-over-year growth of 14.29%. The stock has gained 74.2% in the holiday season and carries a Zacks Rank #3.

Hibbett Sports Inc. HIBB

This Alabama-based company operates athletic specialty stores in small and mid-sized markets primarily in the South, Southwest, Mid-Atlantic, and the Midwest regions of the United States. It saw positive earnings estimate revision of four cents for the holiday quarter over the past two months but its earnings are likely to decline 48.15% from the year-ago quarter. HIBB has a Zacks Rank #1 (Strong Buy) and is up 63.4% since the start of November. You can see the complete list of today’s Zacks #1 Rank stocks here.

Famous Dave's of America Inc. DAVE

This Minnesota-based company owns, operates and franchises barbeque restaurants and blues clubs. The Zacks Consensus Estimate for the holiday quarter has moved up from a loss of 12 cents to a loss of 3 cents over the past 60 days with an expected earnings growth rate of 70%. The stock gained 63.1% during the holiday season and has a Zacks Rank #1.

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