Ask 10 different experts if retail stocks are set to rebound and you’ll get 10 different answers. While the August comps were better than expected at 5% — 80 basis points higher than analyst estimates — many can point to retailers’ heavy use of promotions to lure customers as evidence things aren’t nearly as rosy as the numbers suggest.

Who’s right?

Was the August report just a blip in an otherwise dreary down cycle in retail or are consumers finally confident enough to open their wallets with gusto? In examining the state of retail heading into the holidays, retail’s the biggest time of the year, my answers should help you navigate what are very choppy waters. Retail stocks are definitely not a sure thing at the moment, but that doesn’t mean you shouldn’t invest in them.

Are retail stocks set to rebound? Here’s why I believe so.

Retail Stocks – Macro View

The Fiscal Times columnist Anthony Mirhaydari believes that falling gas prices — projected to drop to their lowest level in two years at an average price per gallon of $2.44 — will inject $82 billion (on an annualized basis) of purchasing power into the economy. The increased purchasing power could lead to a stronger than expected holiday shopping season, which will subsequently light a fire under retail stocks that have been in the doldrums since last holiday.

I couldn’t agree more.

Gas prices affect almost everyone’s spending except perhaps the 1%. A break at the pumps definitely will make it easier for consumers to justify purchases of apparel and other discretionary items. While consumers might favor some retailers over others, I do believe a rising tide will lift all boats.

Detractors will point to Friday’s jobs report, which indicates 142,000 people were added to payrolls in August (well below the 230,000 expected), as proof the recovery is nothing but a mirage. With almost 10 million people still out of work,  they do have a point. However, the unemployment rate sits at 6.1%, the lowest rate since 2008.

In addition, about 4.7 million job openings existed in June according to the Bureau of Labor Statistics, the highest in over a decade. Employers seem to be taking their sweet time filling these positions, which is painting a much worse picture than the reality. Eventually, employers are going to step up to the hiring plate, and when they do retail stocks are going to be big beneficiaries.

Lastly, consumer confidence is higher than it’s been in quite some time. The Thomson Reuters/University of Michigan consumer sentiment index rose in August from 81.8 to 82.5 in July. The index averaged 89 in the five years between December 2002 and the beginning of the recession in December 2007. In the 18 months following the beginning of the recession, the index averaged 64.2 suggesting that on balance consumers are feeling a lot more confident today despite the fact they’re financially worse off.

From a macro view, Americans are definitely pulling themselves out of an economic malaise that’s hindered growth for more than five years. As a glass-half-full kind of person, I see good days ahead for retail stocks.

Retail Stocks – Looking for Singles

For unsure investors, I think your smartest bet at the moment would be to buy the SPDR Retail (XRT), which owns 100 of the biggest and best-known retailers in the country; it’s the de facto proxy for the retail sector.

Retail Stocks – Looking for Doubles

Retailers who save people money will continue to benefit from all the uncertainty. Clearly, the discount store phenomenon has slowed down based on the M&A tussle between Family Dollar (FDO), Dollar Tree (DLTR) and Dollar General (DG). Furthermore, with Walmart (WMT) looking to capture some of its business through smaller, urban locations, discounters are not going to have an easier time in the future.

My bet for conservative investors willing to make a play on a single company is to buy Costco (COST). Costco had a fantastic August — same-store sales growth of 8% excluding gasoline price deflation and foreign exchange — and an equally impressive fourth quarter and fiscal 2014. Costco is always making money off its membership fees. Costco’s business model is second to none, and its management is pretty good too.

Retail Stocks – Looking for Triples

I’m going to go out on a limb here and recommend Gap (GPS), whose stock is plummeting as I write this, down almost 5% thanks to a 2% decline in August same-store sales. The problem for investors is that analysts were expecting a 1.6% gain, and while a 3.6% discrepancy is never a good thing, it’s rather common in retail.

Gap’s problem right now is its stock’s trading at levels not seen since April 2000. CEO Glenn Murphy has an excellent reputation, but when he promises something and doesn’t deliver, the markets are going to let him know he’s in the doghouse.

The August report wasn’t a total dud. Old Navy saw its global comps grow 2%, one percentage point higher than in August 2013, prompting Murphy to comment, “We’re encouraged by the positive momentum at Old Navy, while focused on the necessary steps to drive improved performance across our portfolio of brands in the back half.” Murphy’s a man of his word — Gap’s performance will be better in Q3 and Q4.

Forget about the big three, and instead, focus on Athleta. Lululemon (LULU) is struggling to get its mojo back while competitors are lining up to knock it off its perch. Gap’s Athleta, which is at the top of the list, is gaining the respect of Wall Street analysts. In the long-term, I think LULU stock will make a comeback, but right now I see GPS stock as the better of the two.

Retail Stocks – Looking for Home Runs

One of my favorite retailers anywhere is Buckle (BKE), the Nebraska-based chain that operates 457 stores in 44 states selling primarily to young men and women. Buckle could do no wrong, but its same-store sales have dropped in the past year. In August, Buckle managed to eke out a 0.5% increase, but in the months prior it had seen its share of declines. Poor results from women’s fashions, which represent 58% of Buckle’s overall sales, led to the downturn.

So, why do I like it so much?

Buckle tends to deliver profits in both good periods and bad. In fiscal 2014, Buckle’s same-store sales were flat yet it generated net income of $163 million on $1.1 billion in revenue. Buckle produced similar numbers in 2013 and 2011 when comps were single digits. Buckle generates consistent profits which it then returns to shareholders in the form of special dividends. In the past five years, Buckle has paid out $17.3 in total with $12.3 of that from special dividends.

I’ve long thought Buckle should expand to Canada, where it would face less competition, but conservatively, Buckle opens approximately 10 stores per year, which means decades could pass before it gets an inkling to expand north of the border. I prefer steady-as-she-goes management anyway.

Eventually, Buckle’s going to get its product mix sorted out, and when it does, BKE stock is going to take off. In the meantime, sit back and enjoy the ride.

As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.