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Coronavirus Ruining Portfolio? Give These 4 Retailers a Shot
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A dramatic change in the economy has been noticed over the past three months, thanks to the coronavirus pandemic that also put an abrupt end to the longest bullish run in the America’s stock market history. In fact, the rapidly spreading COVID-19 has claimed innumerable lives and almost disrupted economic activities worldwide. There is hardly any industry that has been spared from the deadly impact of this virus. While the policy makers are walking the tight rope and undertaking every measure to support households, firms and financial markets, uncertainty looms large.
Economists have cautioned about sinking consumer’s confidence level, as this rare catastrophe has already started taking a toll on employment and household income. Market pundits have forecast a sharp fall in GDP as the United States becomes the country worst hit by the pandemic. It goes without saying; these are likely to show on consumer spending with retailers at the receiving end. Nonetheless, retailers are finding ways to tackle the crisis, and evolve and adapt to the changing scenario.
Broader Picture
As people are working from home and maintaining social distancing, players in the industry have been focusing on bolstering omni-channel operations and ramping up delivery services to meet customers’ needs. They are resorting to location analytics and other data-driven tools to better engage with customers. Recently, Tractor Supply Company (TSCO - Free Report) equipped itself to offer same-day delivery of its merchandise by expanding partnership with Roadie. The company is now poised to offer this service through all of its 1,863 U.S. locations.
A paradigm shift in consumers buying behavior is being noticed due to the pandemic. People are shopping essential items rather than making discretionary purchases. There has been an increased demand for grocery, packaged water, hand sanitizers, tissue paper, cleaning wipes, infant supplies and related staples. Moreover, as people cook meals demand for home appliances is also high.
As Americans are stocking up, companies are leaving no stone unturned to fill the shelves faster. Certainly, the increased demand calls for increased number of workers to ensure prompt services. Industry bellwethers such as Walmart (WMT - Free Report) and Amazon (AMZN - Free Report) are hiring to ensure swift customer service amid such challenging times.
The coronavirus pandemic has in a way turned out to be a blessing for retailers as they are trying to expand online and delivery services, which will enhance prospects after the virus-induced crisis eases. Experts believe that once the coronavirus spread is contained and vaccine discovered, the retail sector, which touches every sphere of our life, is likely to witness a sharp rebound. Even now there are stocks that could be a great addition to your portfolio.
Investors can count on Sprouts Farmers Market (SFM - Free Report) , which provides fresh, natural, and organic food products. This Zacks Rank #1 company has a long-term earnings growth rate of 5.8% and a VGM Score of B. It has a trailing four-quarter positive earnings surprise of 28.7%, on average. Moreover, the Zacks Consensus Estimate for its current financial year earnings has moved up 2.3% in the past 30 days.
Costco (COST - Free Report) , which operates membership warehouses, is a solid bet with a Zacks Rank #2 and a VGM Score of B. The company has a trailing four-quarter positive earnings surprise of 3.1%, on average and a long-term earnings growth rate of 8.4%. The Zacks Consensus Estimate for its current financial year earnings has improved roughly 1% in the past 30 days.
We also suggest investing in Best Buy (BBY - Free Report) with a long-term earnings growth rate of 7.6%. This retailer of technology products, services, and solutions has a trailing four-quarter positive earnings surprise of 9.7%, on average. The stock has a Zacks Rank #2 and a VGM Score of A.
Another stock worth considering is Rite Aid , which operates a chain of retail drugstores. The company’s bottom line has outpaced the Zacks Consensus Estimate in the last two reported quarters. The stock has a Zacks Rank #2 and a VGM Score of A. The Zacks Consensus Estimate for its current financial year earnings has increased by a penny in the past 30 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Coronavirus Ruining Portfolio? Give These 4 Retailers a Shot
A dramatic change in the economy has been noticed over the past three months, thanks to the coronavirus pandemic that also put an abrupt end to the longest bullish run in the America’s stock market history. In fact, the rapidly spreading COVID-19 has claimed innumerable lives and almost disrupted economic activities worldwide. There is hardly any industry that has been spared from the deadly impact of this virus. While the policy makers are walking the tight rope and undertaking every measure to support households, firms and financial markets, uncertainty looms large.
Economists have cautioned about sinking consumer’s confidence level, as this rare catastrophe has already started taking a toll on employment and household income. Market pundits have forecast a sharp fall in GDP as the United States becomes the country worst hit by the pandemic. It goes without saying; these are likely to show on consumer spending with retailers at the receiving end. Nonetheless, retailers are finding ways to tackle the crisis, and evolve and adapt to the changing scenario.
Broader Picture
As people are working from home and maintaining social distancing, players in the industry have been focusing on bolstering omni-channel operations and ramping up delivery services to meet customers’ needs. They are resorting to location analytics and other data-driven tools to better engage with customers. Recently, Tractor Supply Company (TSCO - Free Report) equipped itself to offer same-day delivery of its merchandise by expanding partnership with Roadie. The company is now poised to offer this service through all of its 1,863 U.S. locations.
A paradigm shift in consumers buying behavior is being noticed due to the pandemic. People are shopping essential items rather than making discretionary purchases. There has been an increased demand for grocery, packaged water, hand sanitizers, tissue paper, cleaning wipes, infant supplies and related staples. Moreover, as people cook meals demand for home appliances is also high.
As Americans are stocking up, companies are leaving no stone unturned to fill the shelves faster. Certainly, the increased demand calls for increased number of workers to ensure prompt services. Industry bellwethers such as Walmart (WMT - Free Report) and Amazon (AMZN - Free Report) are hiring to ensure swift customer service amid such challenging times.
The coronavirus pandemic has in a way turned out to be a blessing for retailers as they are trying to expand online and delivery services, which will enhance prospects after the virus-induced crisis eases. Experts believe that once the coronavirus spread is contained and vaccine discovered, the retail sector, which touches every sphere of our life, is likely to witness a sharp rebound. Even now there are stocks that could be a great addition to your portfolio.
4 Prominent Picks
We have shortlisted stocks on the basis of 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.
Investors can count on Sprouts Farmers Market (SFM - Free Report) , which provides fresh, natural, and organic food products. This Zacks Rank #1 company has a long-term earnings growth rate of 5.8% and a VGM Score of B. It has a trailing four-quarter positive earnings surprise of 28.7%, on average. Moreover, the Zacks Consensus Estimate for its current financial year earnings has moved up 2.3% in the past 30 days.
Costco (COST - Free Report) , which operates membership warehouses, is a solid bet with a Zacks Rank #2 and a VGM Score of B. The company has a trailing four-quarter positive earnings surprise of 3.1%, on average and a long-term earnings growth rate of 8.4%. The Zacks Consensus Estimate for its current financial year earnings has improved roughly 1% in the past 30 days.
We also suggest investing in Best Buy (BBY - Free Report) with a long-term earnings growth rate of 7.6%. This retailer of technology products, services, and solutions has a trailing four-quarter positive earnings surprise of 9.7%, on average. The stock has a Zacks Rank #2 and a VGM Score of A.
Another stock worth considering is Rite Aid , which operates a chain of retail drugstores. The company’s bottom line has outpaced the Zacks Consensus Estimate in the last two reported quarters. The stock has a Zacks Rank #2 and a VGM Score of A. The Zacks Consensus Estimate for its current financial year earnings has increased by a penny in the past 30 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>