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3 Retail Stocks That Can Bounce Off the Ropes

Catch a bargain with retail stocks that are down, but not out

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Retail stocks have battled ferocious headwinds in the first half of 2014 — depressed further by big earnings misses from some of the biggest names like Walmart (WMT), Target (TGT), Macy’s (M).

arrowsBut while bad news has hammered retail stocks across the sector, don’t overlook potential bargains that are poised for a comeback.

Most retail stocks have slogged through a disappointing year so far as rosier employment numbers, and the end of an unusually cold winter failed to spark sales gains. Perhaps more puzzling, sluggish sales dogged chains across the retail spectrum: high-end, low-end, department stores, boutique and specialty shops.

Even during the Great Recession, low-to-middle income shoppers became more price conscious and selective — lifting stocks like Dollar Tree (DLTR) and Dollar General (DG). Meanwhile, well-off consumers kept high-end retailers like Saks (SKS) and Tiffany (TIF) in business. Now, however, there’s more than enough pain to go around, as InvestorPlace Editor Jeff Reeves has explained.

Although retail stocks have looked bearish lately, growth investors can catch a bargain if they’re willing to do some bottom-fishing in the retail stock pond. Bottom-fishing is a bet that a bean-down stock will bounce back and deliver strong returns.

For investors with a higher tolerance for risk, here are three retail stocks that are down, but not out:

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