Stocks are the only item that, when they go on sale, people DON’T want to buy them.
But stock pull backs, like the one we’ve had so far in 2014, provide real opportunities for investors.
It’s time to think about all those stocks that you’ve said, “if only I had bought that a year ago.” Because pull backs mean that investors can suddenly get their favorite stocks much cheaper.
What stocks are on your wish list? It’s time to get that wish list out and go stock shopping.
Retail Was Hot But Now It’s Not
A lot of the stocks on my own personal wish list are retailers. It’s been a hot sector the last few years as the niche retailers have been able to expand both in the United States and internationally as the global economy improved.
But by the end of 2013, valuations and expectations got too expensive for my blood. While many of the retailers have growth, forward P/Es in the 30s and 40s were too high. It looked like the opportunity to buy had passed me by.
But 2014 is turning out to be very different than 2013. While the overall market indices have pulled back just 3% to 5%, some individual sectors, including retail, have been hit much harder.
Many of the retailers have been disappointing on earnings. Some have also warned about a “challenging” retail environment and have lowered full year guidance. And then, to top it all off, there’s the awful weather.
Because of the negative perceptions of the sector, some of the hottest retail stocks have gone on sale.
3 Hot Retail Stocks That Are Now on Sale
2. Tractor Supply
3. Restoration Hardware
It wasn’t easy to find three hot retailers that have gotten cheaper AND have a Zacks Rank of #1, #2 or #3. Many retailers are Zacks Rank #4 (Sell) or #5 (Strong Sells). But these three companies currently are Zacks Rank #3 (Hold) stocks.
What they also have in common is a strong distinctive corporate culture with a strong brand.
lululemon has a “manifesto” that is printed on its shopping bags and around its stores with phrases like: “Do one thing a day that scares you” and “Sweat once a day to regenerate your skin.”
Tractor Supply’s marketing slogan is: “For Life Out Here” and it publishes a free quarterly magazine called “Out Here” with articles about local artisans, craft and home projects and recipes.
Restoration Hardware has a vision statement that says: “To create an endless reflection of hope, inspiration and love that will ignite the human spirit and change the world.”
Brand is important and these three retailers have it in spades.