Most of the stocks below have been punished by the markets in recent weeks, and might be worth buying into now as investors start turning towards the upcoming holiday shopping season. The shopping season that begins just after Thanksgiving with "Black Friday" is the strongest for most retailers and it boosts the sales of everything from clothing, computers, to toys and more. With Black Friday just about two weeks away, it makes sense to start positioning your portfolio to benefit from the inevitable media reports of hot selling items, midnight store openings and lines at the front door for certain retailers. The National Retail Federation is forecasting a 2.8% increase in holiday sales to about $466 billion. The holiday sales season should therefore be solid (compared to the gloom and doom of most headlines) and even great for some retailers. Here are several stocks that might see an increase in sales as well as stock price appreciation in the coming weeks:
Apple, Inc. (NASDAQ:AAPL) shares are trading at $399.73. Apple is a leading maker of computers and mobile devices. The 50-day moving average is $394.92 and the 200-day moving average is $361.65. Earnings estimates for AAPL are about $34.49 per share in 2011 and $38.56 for 2012. The 52 week range is $297.76 to $426.70. Apple is a great company and will probably continue to be a solid investment for the foreseeable future. Dips below $395 would appear to be a good buying opportunity since this is right around a key support level (the 50-day moving average). A number of Apple products are likely to be hot this holiday, and the iPad could be a top gift.
Amazon.com, Inc. (NASDAQ:AMZN) shares are trading at $217. Amazon is a Internet retailing giant and is based in Washington. The shares have traded in a range between $156.77 to $246.71 in the past 52 weeks. The 50-day moving average is $223.28 and the 200-day moving average is $198.47. Earnings estimates for AMZN are $1.22 per share in 2011, and $2.07 for 2012. This company is expanding into areas that could lead to continued strong growth in the future, however, the PE ratio is far too rich for some investors. I would only consider short term trading opportunities with Amazon. It makes sense to buy dips and sell the rallies, and with new products like the Kindle Fire, this stock could see a gradual rise as we get closer to Black Friday.
Nordstrom, Inc. (NYSE:JWN) shares are trading at $50.63. JWN is a leading high end specialty retail department store. These shares have traded in a range between $37.28 to $53.35 in the past 52 weeks. The 50-day moving average is $48.12 and the 200-day moving average is $45.81. Earnings estimates for JWN are $3.05 per share in 2011 and $3.49 for 2012. The dividend is 92 cents per share which offers a yield of 1.9%. Since Nordstrom shoppers are upper middle class they are likely to spend more than average this season. Also, the stock is acting very strong and trading close to 52 week highs. Because of this, it seems likely that JWN shares will make new highs between now and Black Friday.
Target Corporation (NYSE:TGT) shares are trading at $52.83. Target is a major retailer of everything from toys, to clothes to food and more. These shares have traded in a range between $45.28 to $60.97 in the past 52 weeks. The 50-day moving average is $51.85 and the 200-day moving average is $50.44. Earnings estimates for TGT are $4.23 per share in 2011, and $4.34 for 2012. Target sells many items that are purchased by holiday shoppers. Target is not the best managed company and any holiday season pop is likely to be only temporary, so I would sell on any rallies.
Best Buy (NYSE:BBY) shares are trading at $26.46. Best Buy is a leading retailer of electronics and is based in Minnesota. The 50-day moving average is $25 and the 200-day moving average is $28.76. Earnings estimates for BBY are about $3.41 per share in 2011 and $3.60 for 2012, so the PE ratio is only about 8. The book value is stated at $16.65. Best Buy pays a dividend of 64 cents per share which is equivalent to a yield of 2.3%. Best Buy sells computers, tablets, cameras, televisions and other items that are usually popular with holiday shoppers. Best Buy also heavily promotes sales and specials on Black Friday.
Gap, Inc. (NYSE:GPS) shares are trading at $19.90. The Gap operates a chain of specialty retail clothing stores. These shares have traded in a range between $15.08 to $23.73 in the past 52 weeks. The 50-day moving average is $17.33 and the 200-day moving average is $19.33. Earnings estimates for GPS are $1.45 per share in 2011 and $1.70 for 2012, so the forward PE ratio is about 9 on these shares. GPS pays a dividend of 45 cents per share which is equivalent to a 2.7% yield. With many consumers looking for value when buying clothing for the holiday season, and the Gap will likely benefit. Another positive is that the stock has been acting strong lately, it might be hitting new 52 week highs around Black Friday.
Disclosure: I am long AAPL.
The data is sourced from Yahoo Finance and Stockcharts.com. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes only.