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5 Retail Stocks to Buy As May Sales Register Record Spike
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Consumer spending activity, which remains one of the pivotal factors driving the economy, regained momentum with Americans back on the streets following the easing of coronavirus-induced lockdown. It is quite clear that gradual reopening of the economy and measures undertaken to support households such a stimulus checks and enhanced unemployment benefits triggered demand. As a result, U.S. retail sales rebounded sharply in May, marking the biggest gain since 1992 and exceeding analysts’ expectations.
The Commerce Department stated that U.S. retail and food services sales in May climbed 17.7% to $485.5 billion, following declines of 14.7% and 8.3% in April and March, respectively, when people restricted their purchases to essentials, curtailed discretionary spending and largely stayed at home. This monthly jump boosted investor confidence and sent markets soaring yesterday. Economists were anticipating about 8% increases in retail sales.
With business activities resumed and lockdown lifted, Americans flocked to restaurants and bars, bought apparels, spent on gasoline, and purchased sports equipment, furniture and electronics & appliance. No wonder, sales at non-store retailers continued to increase.
Surge in retail sales was the latest sign of green shoots in the economy, following the stunning addition of 2.5-million jobs last month. However, analysts cautioned that the path to recovery looks long and bumpy, given roughly 20 million people lost their jobs since February, historically high unemployment rate of 13.3% and resurgence of coronavirus cases. Moreover, analysts believe that once extra unemployment benefits end, consumer spending activity may retreat.
Again, May retail sales were still down year over year and also below their February level. While retail sales surged month-on-month basis, they have fallen 6.1% from May 2019 and were about 8% below the February 2020 level.
Consequently, economists forecast a significant fall in U.S. GDP for April-June quarter. It comes as no surprise that policy-makers have been frantically working toward urgent repairs. Matthew Shay, chief executive of the National Retail Federation said “The most important thing now is to keep these retail stores open for business and not penalize them by closing their doors in the event of a coronavirus surge.”
Here we have shortlisted five Retail-Wholesale stocks on the basis of a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B.
5 Prominent Picks
You may invest in Sportsman's Warehouse Holdings, Inc. (SPWH - Free Report) , which sports a Zacks Rank #1 and a VGM Score of A. This outdoor sporting goods retailer has a trailing four-quarter positive earnings surprise of 32.5%, on average. Moreover, the Zacks Consensus Estimate for its current financial year earnings has moved up 22% in the past 30 days. The stock has displayed a bullish run on the bourses gaining 60.1% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
eBay Inc. (EBAY - Free Report) , which operates the marketplace and classifieds platforms that connect buyers and sellers globally, is also a solid bet with a Zacks Rank #1 and a VGM Score of B. The company has a trailing four-quarter positive earnings surprise of 6.2%, on average. It has a long-term earnings growth rate of 12.8%. The Zacks Consensus Estimate for its current financial year earnings has improved 12% in the past 30 days. Moreover, the stock has rallied 33.2% so far in the year.
We also suggest investing in Tractor Supply Company (TSCO - Free Report) , which has a long-term earnings growth rate of 12%. This operator of rural lifestyle retail stores reported a positive earnings surprise in the last reported quarter. The stock has a Zacks Rank #2 and a VGM Score of B. Moreover, the Zacks Consensus Estimate for its current financial year earnings has moved up 18% in the past 30 days. The stock has advanced 32.5% so far in the year.
Investors can count on Domino's Pizza, Inc. (DPZ - Free Report) , with a long-term earnings growth rate of 12.8%. This pizza company has a trailing four-quarter positive earnings surprise of 12.7%, 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 earnings has improved 4% in the past 30 days. Notably, the stock has surged 27.5% year to date.
Dollar General Corporation (DG - Free Report) , a discount retailer, is also worth betting with a Zacks Rank #2 and a VGM Score of A. The company has a trailing four-quarter positive earnings surprise of 16.9%, on average. It has a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for its current financial year earnings has risen 9% in the past 30 days. Moreover, the stock has appreciated 22.3% year to date.
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.
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5 Retail Stocks to Buy As May Sales Register Record Spike
Consumer spending activity, which remains one of the pivotal factors driving the economy, regained momentum with Americans back on the streets following the easing of coronavirus-induced lockdown. It is quite clear that gradual reopening of the economy and measures undertaken to support households such a stimulus checks and enhanced unemployment benefits triggered demand. As a result, U.S. retail sales rebounded sharply in May, marking the biggest gain since 1992 and exceeding analysts’ expectations.
The Commerce Department stated that U.S. retail and food services sales in May climbed 17.7% to $485.5 billion, following declines of 14.7% and 8.3% in April and March, respectively, when people restricted their purchases to essentials, curtailed discretionary spending and largely stayed at home. This monthly jump boosted investor confidence and sent markets soaring yesterday. Economists were anticipating about 8% increases in retail sales.
With business activities resumed and lockdown lifted, Americans flocked to restaurants and bars, bought apparels, spent on gasoline, and purchased sports equipment, furniture and electronics & appliance. No wonder, sales at non-store retailers continued to increase.
Surge in retail sales was the latest sign of green shoots in the economy, following the stunning addition of 2.5-million jobs last month. However, analysts cautioned that the path to recovery looks long and bumpy, given roughly 20 million people lost their jobs since February, historically high unemployment rate of 13.3% and resurgence of coronavirus cases. Moreover, analysts believe that once extra unemployment benefits end, consumer spending activity may retreat.
Again, May retail sales were still down year over year and also below their February level. While retail sales surged month-on-month basis, they have fallen 6.1% from May 2019 and were about 8% below the February 2020 level.
Consequently, economists forecast a significant fall in U.S. GDP for April-June quarter. It comes as no surprise that policy-makers have been frantically working toward urgent repairs. Matthew Shay, chief executive of the National Retail Federation said “The most important thing now is to keep these retail stores open for business and not penalize them by closing their doors in the event of a coronavirus surge.”
Here we have shortlisted five Retail-Wholesale stocks on the basis of a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B.
5 Prominent Picks
You may invest in Sportsman's Warehouse Holdings, Inc. (SPWH - Free Report) , which sports a Zacks Rank #1 and a VGM Score of A. This outdoor sporting goods retailer has a trailing four-quarter positive earnings surprise of 32.5%, on average. Moreover, the Zacks Consensus Estimate for its current financial year earnings has moved up 22% in the past 30 days. The stock has displayed a bullish run on the bourses gaining 60.1% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
eBay Inc. (EBAY - Free Report) , which operates the marketplace and classifieds platforms that connect buyers and sellers globally, is also a solid bet with a Zacks Rank #1 and a VGM Score of B. The company has a trailing four-quarter positive earnings surprise of 6.2%, on average. It has a long-term earnings growth rate of 12.8%. The Zacks Consensus Estimate for its current financial year earnings has improved 12% in the past 30 days. Moreover, the stock has rallied 33.2% so far in the year.
We also suggest investing in Tractor Supply Company (TSCO - Free Report) , which has a long-term earnings growth rate of 12%. This operator of rural lifestyle retail stores reported a positive earnings surprise in the last reported quarter. The stock has a Zacks Rank #2 and a VGM Score of B. Moreover, the Zacks Consensus Estimate for its current financial year earnings has moved up 18% in the past 30 days. The stock has advanced 32.5% so far in the year.
Investors can count on Domino's Pizza, Inc. (DPZ - Free Report) , with a long-term earnings growth rate of 12.8%. This pizza company has a trailing four-quarter positive earnings surprise of 12.7%, 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 earnings has improved 4% in the past 30 days. Notably, the stock has surged 27.5% year to date.
Dollar General Corporation (DG - Free Report) , a discount retailer, is also worth betting with a Zacks Rank #2 and a VGM Score of A. The company has a trailing four-quarter positive earnings surprise of 16.9%, on average. It has a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for its current financial year earnings has risen 9% in the past 30 days. Moreover, the stock has appreciated 22.3% year to date.
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 >>