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5 Stocks to Snap Up From Favorably-Ranked Retail Industries
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The investment scenario has turned topsy-turvy of late, with no respite in sight. Tensions between two of the world’s biggest economies aggravated after Trump asked U.S. Trade Representatives to locate options to impose another $100 billion in tariffs on China products. Although the effective date of tariff implementation has not been decided yet, a fresh bout of uncertainty is about to spook the Wall Street.
So, how to play it out? Instead of being a mute spectator and waiting for a convincing economic environment, one should try and identify stocks that have the potential to outperform even when market conditions are not congenial. For such tumultuous periods, targeting stocks with earnings growth potential from top-ranked industries is the mantra.
Among the 16 Zacks sectors, we are focusing on the Retail-Wholesale sector here.
How is the Sector Poised?
Notably, the Retail-Wholesale sector has advanced roughly 11% in the past six months and has comfortably outperformed the S&P 500’s gain of 5%. According to the latest Earnings Outlook, as of Apr 4, the sector is expected to record top and bottom-line growth of 7.6% and 12.1%, respectively, this year.
Industry experts believe that with unemployment rate still at 17-year low, initial jobless claims plunging to 45-year low and consumer spending being favorable, things are fairly positive for the U.S. economy. Notably, a strengthening labor market may lead to gradual wage acceleration, and in turn boost consumer confidence. All these sound constructive for retailers.
However, we understand that the space is not fully immune to global uncertainties, which could limit growth. We are cautiously optimistic about the sector’s overall performance. Heightened online competition, lower footfall and evolving consumer shopping patterns have compelled retailers to re-examine their strategies. They are now focusing more on enhancing omni-channel capabilities, optimizing store fleet and restructuring activities.
Here we have highlighted five stocks from the aforementioned retail industries flaunting a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Value Score of A or B.
We suggest investing in Macy's, Inc. (M - Free Report) from the Retail – Regional Department Stores industry with a long-term earnings growth rate of 8.5% and a Value Score of A. This seller of apparel and accessories, cosmetics, home furnishings and other consumer goods, delivered positive earnings surprises in the last three quarters and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Another stock worth considering is PC Connection, Inc. (CNXN - Free Report) from the Retail - Computer Hardware industry, which has a long-term earnings growth rate of 8% and a Value Score of B. This provider of a range of information technology solutions delivered a positive earnings surprise of 1.9% last quarter. The stock carries a Zacks Rank #2.
Investors can also count on Ingles Markets, Incorporated (IMKTA - Free Report) , which operates a chain of supermarkets. This Zacks Rank #2 company has a long-term earnings growth rate of 3.2% and a Value Score of B. The stock belongs to the Retail – Supermarkets industry.
Insight Enterprises, Inc. (NSIT - Free Report) , which provides information technology hardware, software, and cloud and service solutions to government, healthcare, business and educational clients, is a solid bet with a Zacks Rank #2 and a Value Score of A. The company posted an average positive earnings surprise of 30.8% in the trailing four quarters. The stock belongs to the Retail - Mail Order industry.
Penske Automotive Group, Inc. (PAG - Free Report) from the Automotive - Retail And Whole Sales industry has a long-term earnings growth rate of 7.9% and a Value Score of A. The company, which is engaged in the operation of automotive and commercial truck dealerships, posted an average positive earnings surprise of 2.4% in the trailing four quarters and carries a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
5 Stocks to Snap Up From Favorably-Ranked Retail Industries
The investment scenario has turned topsy-turvy of late, with no respite in sight. Tensions between two of the world’s biggest economies aggravated after Trump asked U.S. Trade Representatives to locate options to impose another $100 billion in tariffs on China products. Although the effective date of tariff implementation has not been decided yet, a fresh bout of uncertainty is about to spook the Wall Street.
So, how to play it out? Instead of being a mute spectator and waiting for a convincing economic environment, one should try and identify stocks that have the potential to outperform even when market conditions are not congenial. For such tumultuous periods, targeting stocks with earnings growth potential from top-ranked industries is the mantra.
Among the 16 Zacks sectors, we are focusing on the Retail-Wholesale sector here.
How is the Sector Poised?
Notably, the Retail-Wholesale sector has advanced roughly 11% in the past six months and has comfortably outperformed the S&P 500’s gain of 5%. According to the latest Earnings Outlook, as of Apr 4, the sector is expected to record top and bottom-line growth of 7.6% and 12.1%, respectively, this year.
Industry experts believe that with unemployment rate still at 17-year low, initial jobless claims plunging to 45-year low and consumer spending being favorable, things are fairly positive for the U.S. economy. Notably, a strengthening labor market may lead to gradual wage acceleration, and in turn boost consumer confidence. All these sound constructive for retailers.
However, we understand that the space is not fully immune to global uncertainties, which could limit growth. We are cautiously optimistic about the sector’s overall performance. Heightened online competition, lower footfall and evolving consumer shopping patterns have compelled retailers to re-examine their strategies. They are now focusing more on enhancing omni-channel capabilities, optimizing store fleet and restructuring activities.
There are some industries in the Retail-Wholesale sector that are worth mentioning, as they occupy a favorable position in the list of Zacks industries – Retail – Regional Department Stores (2 out of 256) Retail - Computer Hardware (24 out of 256), Retail - Supermarkets (67 out of 256), Retail - Mail Order (71 out of 256), and Automotive - Retail And Whole Sales (81 out of 256).
5 Prominent Stocks
Here we have highlighted five stocks from the aforementioned retail industries flaunting a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Value Score of A or B.
We suggest investing in Macy's, Inc. (M - Free Report) from the Retail – Regional Department Stores industry with a long-term earnings growth rate of 8.5% and a Value Score of A. This seller of apparel and accessories, cosmetics, home furnishings and other consumer goods, delivered positive earnings surprises in the last three quarters and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Another stock worth considering is PC Connection, Inc. (CNXN - Free Report) from the Retail - Computer Hardware industry, which has a long-term earnings growth rate of 8% and a Value Score of B. This provider of a range of information technology solutions delivered a positive earnings surprise of 1.9% last quarter. The stock carries a Zacks Rank #2.
Investors can also count on Ingles Markets, Incorporated (IMKTA - Free Report) , which operates a chain of supermarkets. This Zacks Rank #2 company has a long-term earnings growth rate of 3.2% and a Value Score of B. The stock belongs to the Retail – Supermarkets industry.
Insight Enterprises, Inc. (NSIT - Free Report) , which provides information technology hardware, software, and cloud and service solutions to government, healthcare, business and educational clients, is a solid bet with a Zacks Rank #2 and a Value Score of A. The company posted an average positive earnings surprise of 30.8% in the trailing four quarters. The stock belongs to the Retail - Mail Order industry.
Penske Automotive Group, Inc. (PAG - Free Report) from the Automotive - Retail And Whole Sales industry has a long-term earnings growth rate of 7.9% and a Value Score of A. The company, which is engaged in the operation of automotive and commercial truck dealerships, posted an average positive earnings surprise of 2.4% in the trailing four quarters and carries a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>