3 Top Retail Stocks To Watch This Week
Retail stocks have had it rough in the stock market this year. This is expected as the overall economic activity around the globe was decimated by the coronavirus pandemic. Despite 2020 being a turbulent year for retail, things do seem to be looking on the bright side in December. With Pfizer’s (PFE Stock Report) and Moderna’s (MRNA Stock Report) vaccines already vaccinating over 1 million people in the U.S., this does raise the prospects for retail stocks. Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, said that things could go back to normal by next summer. This is of course if the rollout of the coronavirus vaccines proceeds smoothly. In light of this, could the top retail stocks make a gradual recovery?
To top things off, the U.S. Congress has recently approved a stimulus package that is worth $900 billion to spur growth in the economy. However, this figure could be increased as President Donald Trump is requesting up to $2,000 for individuals instead of the Congress approved $600 cheques. This would spur growth in an economy that has contracted in 2020. If it’s good news for the economy then this would also be good news for the stock market.
If you think about it, retail and consumers mean a lot to the U.S. economy. Regardless of how things have turned out this year, the fact remains that every country needs its consumers to get back to working and spending those wages. By looking at retail companies like Target (TGT Stock Report) and Costco (COST Stock Report), investors can see that these companies have benefited from the first stimulus check. With that in mind, are these the best retail stocks to buy this week?
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Best Retail Stocks To Buy [Or Sell] This Week: Macy’s
First on this list is Macy’s (M Stock Report). Macy’s is the largest U.S. department store company by retail sales. It has over 500 stores and has over 130,000 employees. The company’s flagship store is in New York City and features about 1.1 million square feet of retail space.
How has the company been doing financially? In the company’s third-quarter fiscal reported last month, Macy’s reports a solid performance across all three of its brands. Namely, they are Macy’s, Bloomingdale’s, and Bluemercury. In this quarter, the company made $4.0 billion in net sales. The company also has strong liquidity with approximately $1.6 billion in cash. Macy’s also reported that its digital sales grew by 27% compared to a year earlier.
Macy’s does seem like it could survive the pandemic and thrive in 2021 when people return to shopping. In recent news, Macy says it will be offering last-minute shoppers inspiration with its gift choices on its online store, macys.com. Last month, the company also announced that Malek Robert Amirshahi has been named as senior vice president of corporate communications for the company. Amirshahi is an award-winning, 20 plus year veteran of the media and telecommunications industry. With all things said, will you include M stock into your portfolio?
Best Retail Stocks To Buy [Or Sell] This Week: The Home Depot
Home Depot (HD Stock Report) is the largest home improvement retailer in the U.S. It supplies tools, construction products, and services. You could say that Home Depot is one of the more successful retail stocks this year. This is because it has seen its revenue and net income grow by double digits as millions of homeowners have spent more time doing home improvement works in 2020. The company’s shares have been up by over 70% since March.
In the company’s third-quarter fiscal posted last month, it reported sales of $33.5 billion which is an impressive 23.2% increase from a year earlier. Comparable sales for the quarter also increased by 24.1%. Also, Home Depot reports a net earnings of $3.4 billion, which is a 21% increase. The company attributes this amazing quarter to the continuation of outsized demand for home improvement projects. CEO Craig Menear also has this to say “Our ability to effectively adapt to this high-demand environment is a testament to both the investments we have made in the business as well as our associates’ focus on customers. We continue to lean into these investments because we believe they are critical in enabling market share growth in any economic environment.”
Will Home Depot be able to keep this momentum going in 2021? The company today has just announced that it has completed the acquisition of HD Supply Holdings for a total enterprise value of approximately $8 billion. HD Supply is a leading national distributor of maintenance, repair, and operations (MRO) products. This acquisition would provide Home Depot with existing and new MRO customers which would boost its business even more. With such exciting development surrounding the company, will you have HD stock on your watchlist?
Best Retail Stocks To Buy [Or Sell] This Week: Nordstrom Inc.
Last on this list is Nordstrom (JWN Stock Report). Nordstrom is America’s favorite luxury department store chain. The company started as a shoe store but has since evolved into a full-line retailer with clothing, footwear, handbags, and jewelry to name a few. The company operates over 100 stores in the U.S. and Canada. Nordstrom shares have more than doubled since November.
The company has also reported its third-quarter earnings last month. In this quarter, Nordstrom made $3 billion in net sales. Despite suffering some drawbacks in its traditional brick-and-mortar stores, the company excelled in digital sales, with about $1.6 billion in sales. The company attributes this increase in digital sales by offering its customers greater convenience and connection. This includes the expansion of its online order pickup services to nearly 350 locations.
Like Macy’s, Nordstrom is also offering last minute services for same-day gifting for last-minute shoppers to get a gift for their loved ones. The company does seem to be bouncing back better than many other retailers due to its stronger e-commerce presence. With the vaccine being rolled out already, could Nordstrom make further gains next year? All things considered, will this be enough for you to buy JWN stock?