There is no question that consumers opened their wallets for holiday purchases this year, with online sales figures on both Black Friday and Cyber Monday hitting records.
Shoppers spent $5 billion online on Black Friday, up 16.9% over last year, and Cyber Monday sales reached $6.59 billion, a 16.8% increase. Monday was officially the largest online shopping day in U.S. history.
There is also evidence that brick-and-mortar retailers saw solid traffic and spending, which continues to bode well for the remainder of the holiday season. The total number of people that visited actual stores on Black Friday and Thanksgiving fell 4% year-over-year. However, the 137 million people that physically went shopping over the four-day Black Friday weekend was more than the 102 million consumers who went out in 2015.
Even as more and more people shop online, I continue to believe that brick and mortar is a proxy of sorts for Main Street. I see the group as a whole moving higher over time, so now is the time to position ourselves to benefit from the upside.
I’ve been champing at the bit to pull the trigger on three stocks in particular. One gave my subscribers a buy signal this week, and I’m keeping the other two on my radar for now. Let’s talk briefly about each:
Burlington Stores Inc (NYSE:BURL) has long been one of my favorite companies, going back years to when my mother liked to shop there and told me about it. I suspect you’re familiar with it, too. The company sells clothing, coats, baby items, furniture and other home-related items, and it currently has stores in 45 states.
Earnings are expected to grow 17% in the current quarter and 32% in the current 2018 fiscal year. BURL beat in its last report, with comparable-store sales growing and margins improving nicely from 41.2% the previous year to 42.2%.
The stock has traded well since mid-August, but there is still decent value here with it trading at 22X future earnings and a PEG (price/earnings-to-growth) ratio of 1.3. That’s not incredibly cheap, but it’s not bad in this market either. The stock looks to be breaking out above $105, which is what gave my subscribers a buy signal this week, and I see it heading into the mid-$120’s and approaching $130 over time.
Etsy Inc (NASDAQ:ETSY) is an online marketplace that sells unique and creative products, including handmade items, vintage goods and craft supplies. It allows its customers to create their own businesses with the ability to reach shoppers in nearly every country in the world. The website currently has 1.9 million active sellers with 45 million listed items and approximately 31.7 million active buyers.
ETSY has been in an uptrend since March, reaching highs just under $18. It broke out above its 50- and 200-day moving averages, and while the stock has spent the last couple of months consolidating its gains around support at the 50-day, I suspect it is building a base for its next leg higher.
At first glance, Tractor Supply Company (NASDAQ:TSCO) may not sound like your average brick-and-mortar retailer. Founded in 1938 as a mail-order catalog business selling tractor parts, TSCO has since growth into the largest operator of rural lifestyle retail stores in the United States. The company has more than 1,600 stores in 49 states that supply basic maintenance products for home, land, and pet and animal owners.
Believe it or not, you can get pretty much anything at a Tractor Supply store except for tractors.
After a rough start to the year, TSCO put in a bottom over the summer and has been performing better since. Its 50-day moving average has acted as near-term support on its climb higher, and the stock recently broke out above its 200-day average as well. The continued action could be a bit choppy as the retail industry works to find its footing, but I do believe TSCO will test its 2016 highs above $75 over time.
Curious what Wall Street insider Charles Payne really thinks? Get more behind-the-scenes insights, valuable market research and hands-on guidance including live stock recommendations from Fox Business’s rising star. Charles Payne’s Smart Talk is absolutely FREE for a limited-time only. Sign up today!