Are These Top Retail Stocks On Your Watchlist This Week?
As we all know, 2020 was a challenging year for retail stocks. Many of the top retail stocks in the stock market fell hard when the pandemic first hit in March. This was due to the forced closure of countless brick-and-mortar stores throughout the year. Conventional shopping virtually became unviable overnight. However, the industry has bounced back to a certain extent. Top retail companies quickly adapted to this situation by bolstering their e-commerce infrastructure. This, in turn, led to huge gains for some of them. As expected, investors flocked back to the revitalized industry just as quickly.
A good example to look at would be American Eagle Outfitters (NYSE: AEO). The company already had adequate e-commerce options set up before the pandemic hit. With digital sales from its AEO Direct division accounting for 29% of its 2019 revenue, the company was in a good position. AEO stock is now up by over 250% since late April. E-commerce giant Chewy (NYSE: CHWY) is also looking at similar gains over that period as well. It has made billions by supplying pet owners with necessary products and feed throughout the pandemic. Coupled with another round of stimulus cheques incoming, the industry could be looking at another tailwind soon. If you are looking for the best e-commerce stocks to consider buying right now, take a look at this list.
Best Retail Stocks To Buy [Or Sell] Now
- iRobot Corporation (NASDAQ: IRBT)
- Bed Bath & Beyond Inc. (NASDAQ: BBBY)
- Pinterest Inc. (NYSE: PINS)
- Costco Wholesale Corporation (NASDAQ: COST)
Right off the bat, we will be looking at iRobot. The Massachusetts-based tech company designs and builds consumer robots. It is the company behind the famous autonomous home cleaning robot, Roomba. IRBT stock surged by over 17% during intraday trading yesterday. Admittedly, there was not much big news regarding the company aside from an endorsement from Investor’s Business Daily. In the bigger picture, IRBT stock seems to be a part of a sudden retail market-wide short squeeze.
The question is, would IRBT stock be worth investing in after the current hype? Well, for one thing, the stocks’ P/E ratio even at yesterday’s closing was at about 21.45. Considering how it is lower than that of the S&P 500 at that time, some might say IRBT stock is undervalued.
Back in October, the company saw green across the board in its third-quarter fiscal. It reported year-over-year gains of 162% in net income and 163% in earnings per share. On top of that, it also reported a 321% jump in cash on hand in the same period. With direct-to-consumer revenue up by 155% year-over-year, demand for iRobot’s products has remained strong. By and large, as consumers gradually adopt the conveniences of its automated appliances, IRBT stock could be looking at more long-term growth. Wouldn’t you agree?
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Bed Bath & Beyond Inc.
Another top retail stock in the limelight now would be Bed, Bath & Beyond or BBBY. The domestic merchandise retail chain giant is also among the recent targets of outsized moves on retail stocks. So much so, that it shot up by over 43% during intraday trading yesterday before closing 1.56% higher.
Well, just last week, BBBY announced two pieces of news that show its intent on gaining momentum moving forward. On January 19, the company announced that it had completed the sale of its Cost Plus World Market. CEO Mark Trittion explained that this move marked the completion of the company’s efforts to streamline its portfolio. Furthermore, BBBY also revealed that it had brought on Mara Sirhal as a Senior VP for its Harmon Health and Beauty Stores division. Sirhal brings almost two decades of experience in retail over from Macy’s (NYSE: M). Overall, it seems like BBBY stock is gearing up for a busy year ahead.
In its recent quarter fiscal, the company reported total revenue of over $4.1 billion. Adding to that, it saw a 415% year-over-year increase in cash on hand which added up to $1.55 billion. Given its solid financial position and refined portfolio, do you see big gains for BBBY stock in the foreseeable future?
Following that, we will be looking at social media company, Pinterest. To point out, PINS stock is up by over 230% in the past year. With people stuck at home, traffic on its platform has gone through the roof. But you may be wondering what it is doing on this list of top retail stocks. Well, like Facebook (NASDAQ: FB), the company’s platform does have marketplace functions. Its “Buyable” and promoted pins enable merchants to sell their wares across the platform. Over the weekend, the company expanded its augmented reality (AR) features for online shoppers.
In this expansion, online shoppers can now ‘try on’ makeup from over 4,000 brands on its platform via AR. According to Pinterest, the feature leverages its existing Lens visual search technology. This integrates its skin tone ranges feature and personalized recommendation algorithms as well. Naturally, this would incentivize customers to make purchases through the app as they get a realistic and personalized experience.
Bear in mind, Pinterest reported having 442 million global monthly active users back in October. Should things go as planned, this could boost its ad revenue as more merchants add their products to the platform. Given the fantastic year the company has had, do you think this could help keep up PINS stock’s current momentum?
Costco Wholesale Corporation
Last but not least is retail giant, Costco. In brief, the company operates a chain of membership-only warehouse clubs. Costco’s unique shopping experience allows members to purchase large quantities of groceries at affordable prices. Unsurprisingly, this would appeal to the general public who are stocking up for long periods stuck at home. This has helped its shares as well with COST stock having a solid year on the stock market in 2020. As the pandemic shows no signs of slowing down soon, investors may be wondering if it has more room to grow this year.
If anything, Costco is not resting on its laurels just yet. Yesterday, the company announced that it would be pilot testing curbside pickup services. This will be done at several warehouses in New Mexico. Essentially, if the company can implement these services for its over 58 million members globally, it could boost sales.
According to Costco, it has retained almost 90% of its paid memberships over the last few years. With loyal customers and the company improving shopper experience, could COST stock be looking at another good year? You tell me.