Seasons have a way of sneaking up on us. I’m sure I’m not the only person coming to the realization that we’re in the ninth week of NFL games. By logical deduction, this means that Black Friday will soon be around the corner. It’s also an opportunity to strategize which blue-chip stocks to buy.
Make no mistake: no matter how digitalized our society becomes, or how many shipping drones that Amazon (NASDAQ:AMZN) acquires, we will always embrace Black Friday. Nothing is more American than discounts, and clawing out your neighbor’s eyeballs to get them.
The statistics speak for themselves. Between 2010 and 2017, total annual retail sales increased an average of 3.7%. Last year, shoppers spent $682 billion, with per-capita spending amounting to $967. This year, the National Retail Federation and Proper Insights & Analytics project that each customer will spend over $1,000.
Of course, e-commerce represents an increasing share of the tally. Still, I don’t expect the Black Friday tradition to go away. Brick-and-mortars have become savvy to Amazon, offering their own e-commerce channels as well as providing exclusive in-store deals. Considering how viable consumer sentiment appears to be, it’s a great idea to prepare your wish list of blue-chip stocks to buy.
And while the specter of a protracted trade war with China weighs heavily on the markets, retail insiders remain optimistic. Since unemployment is down to historical lows, theoretically, more people have resources to spend big this holiday season.
That’s music to the entire business sector’s ears, which have generally suffered steep losses. Here are 10 blue-chip stocks to buy before Black Friday rolls into town:
I must admit I haven’t been a huge fan of Target (NYSE:TGT) in recent years. I sharply disagreed with the big-box retailer’s stance on its restroom policy. Additionally, Target has put up disappointing growth metrics over the past two years.
That said, I can’t deny performance. TGT stock has proven the doubters, including me, wrong. Since the beginning of this year, shares are up 30%. Conspicuously, Target didn’t suffer nearly as much as other retailers in October. If you’re looking for stable blue-chip stocks to buy before Black Friday, TGT is it.
Largely, this is because the retailing giant is going all out for the traditional start to the holiday shopping season. Target has a massive 47-page Black Friday advert featuring astounding deals. For $300, shoppers can buy a 50-inch VIZIO 4K TV. Discounts like that should help propel TGT stock even higher.
It’s confession time, folks: whenever we think about Black Friday, Walmart (NYSE:WMT) enters our mind, and not always for good reasons. But if you’re strategizing your list of blue-chip stocks, Walmart should easily fit into your top holdings.
For one thing, we should discuss its technical performance. WMT stock is one of the rare blue chips that helped support the Dow Jones throughout October. Last month, shares actually gained over 6%. Thanks to its brilliant performance over the last 30-plus days, Walmart is in the black for this year.
Another catalyst for WMT stock is the deals. While the underlying company hasn’t yet revealed its Black Friday specials, we should expect enticing door-busters. Last year, Walmart offered a $300 gift card for purchasing an Apple (NASDAQ:AAPL) iPhone X or 8-series.
Finally, WMT stock is simply a smart investment in the retail sector. It’s fundamentally sound, with management finding new opportunities to compete.
Best Buy (BBY)
Among the top retail-based blue-chip stocks, Best Buy (NYSE:BBY) hasn’t exactly put up great numbers recently. October was particularly trying for BBY stock, ending the month down nearly 12%. But thanks to fundamental and competitive factors, I see big things ahead for Best Buy.
For starters, people should appreciate management’s efforts in turning around what was once a flailing big-box retailer. Transitioning from a free showroom floor for Amazon to a bona fide consumer experience, BBY stock has skyrocketed since 2016. In addition, its ventures into lucrative markets like senior-living security products have garnered positive sentiment.
A recent tailwind boosting BBY stock is Sears’ (OTCMKTS:SHLDQ) implosion. The only thing that could have saved the iconic retailer was a successful shift towards appliance-centric businesses. Clearly, that didn’t work out, which benefits Best Buy. Over the years, BBY has become an appliance powerhouse and it has several locations close to Sears stores.
Even among blue-chip stocks, stability has become a rare commodity in the markets these days. Fortunately for beleaguered investors, we have Costco (NASDAQ:COST). Pioneering the concept of warehouse-style retailers, Costco and COST stock have found consistent demand with shoppers and investors, respectively.
The primary evidence is in the technical performance. Despite it being a predictable investment — large inventory, attractive prices — COST stock keeps making shareholders happy. Shares are up 25% YTD. Sentiment tripped during October, but it recovered nicely. Last month, Costco only dropped 3%, but it’s steadily clawing back those losses.
As with other blue-chip stocks to buy before the Black Friday madness, Costco has outstanding deals. Management will open some of these discounts for shoppers on Nov. 6. In addition, the company will offer huge discounts on electronic devices through its online channel, competing directly with Amazon.
That lets the competition know Costco isn’t messing around. Stability and aggressiveness? Count me in for COST stock!
Quite possibly, Microsoft (NASDAQ:MSFT) is the most balanced investment among blue-chip stocks to buy ahead of the holiday season. With MSFT stock, you get fundamental stability, exposure to video games, and a retail presence.
As anyone who has observed Microsoft’s turnaround strategy knows, the company has returned to fiscal soundness. This was especially evident last month. MSFT stock may have dropped 7%, but that’s not a bad metric given how awful tech-based blue-chip stocks have performed.
Another great catalyst for Microsoft is its video-game business. Every available stat demonstrates that the industry is only getting bigger both domestically and internationally. Thanks to the company’s popular Xbox console, you can expect video-game fans to bolster MSFT stock come Black Friday.
Lastly, let’s not forget that Microsoft has its own retail store, and they’re offering some compelling deals. I especially like MSFT stock over its competitors because the Microsoft Surface tablet effortlessly blends convenience with functionality.
Electronic Arts (EA)
Speaking about video games, we need to have a discussion on Electronic Arts (NASDAQ:EA). EA stock hasn’t had a good October, in which it lost nearly 25%. In fact, EA hasn’t had a good second half for this year. Shares of the video-game giant have lost over 34% since the beginning of July.
With such a steep drop, conservative investors will likely shy away from EA stock. That’s completely understandable given its recent troubles. Electronic Arts has suffered from product delays, and huge competition from Epic Games’ Fortnite. In August, the company had to cancel Madden tournaments due to a senseless and tragic shooting.
I acknowledge the steep challenges but I also believe the bears have overplayed their negativity towards EA stock. The company has lucrative and exclusive sports-licensing rights that make the aforementioned tournaments possible.
Additionally, I think underestimating Electronic Arts’ ability to compete is a mistake. Sure, Fortnite has swept the competition but video-game fads come and go. EA has proven that in the long run, they lever superior engagement with customers.
Before I receive any snide remarks, I fully realize that GameStop (NYSE:GME) isn’t what most people consider a blue chip. Plus, it is hardly a stable outfit considering its 9.8% dividend yield. However, GME stock is unique in that its underlying stores are one-of-a-kind in the video-game industry.
I’m not asking folks to ignore the bad and the ugly. Again, that crazy-high yield says a mouthful. At the same time, heading into Black Friday, it’s not unreasonable to expect a lift for GME stock.
First, we have the deals. GameStop is going to pull out all the stops to compete with traditional retailers. However, they have a critical advantage in that they have a second-hand market. For instance, in a deal that ended a few days ago, gamers could trade in an older console for a hefty discount on a new one.
Second, GME stock should benefit from higher traffic. GameStop offers an easy refund or exchange policy on used products. This allows customers to try their games or accessories before fully committing to them, which ultimately incentivizes sales.
Department stores have not enjoyed a prosperous time during the second half of this year. A notable exception, though, is Nordstrom (NYSE:JWN). Thanks to management’s relevant and effective strategies, JWN stock has offered a bright spot in a troubled sector.
On a YTD basis, Nordstrom shares have gained more than 39%. Even more impressive was the company’s October performance. Last month, JWN stock almost achieved double-digit returns for shareholders. Plus, the retailer has been on the upswing since early July. In contrast, rival Macy’s (NYSE:M) failed to attain traction during the same timeframe.
As I briefly mentioned, Nordstrom’s success comes from smart management. Their discount-centric Nordstrom Rack has generated significant success. Moreover, the company has become much more inclusive, offering inventory and an environment that caters to all sizes.
It’s attention to the small details that sets apart JWN stock from rival offerings. Since the competition hasn’t really kept up, I expect Nordstrom to continue leading the way.
Ulta Beauty (ULTA)
When investors consider blue-chip stocks for Black Friday, Ulta Beauty (NASDAQ:ULTA) doesn’t really fit the common narrative. However, ULTA stock has proven exceptionally resilient in light of recent broader volatility.
For instance, the organization mitigated its losses during the October selloff. While the largest beauty retailer in the U.S. suffered choppiness, ULTA stock dropped only 3%. I know many companies that would love to trade places with Ulta.
A critically important factor driving up share prices is that the beauty specialist is virtually Amazon-proof. Ulta offers a convenient channel for customers to get hands-on with their target products before making a purchase. That’s not a process you can easily duplicate with e-commerce, thus potentially boosting ULTA stock.
Finally, the retailer is likely to offer substantive deals this Black Friday. Prior sales have included half-off pricing, and buy-one-get-one-free, or BOGO deals.
General Motors (GM)
Among the blue-chip stocks to buy mentioned here, General Motors (NYSE:GM) could be the strangest pick. After all, the automotive market has faced fundamental turbulence, driving down most sector players.
So why take a shot on GM stock? Simply put, the competitive pool declined in favor of General Motors. A direct consequence of President Donald Trump taking a hard-line stance on fair trade, Japanese automakers like Toyota (NYSE:TM) have struggled for traction.
I’m not entirely sure how long this circumstance will benefit GM stock, but it could last for a while. Japanese automakers are just as reliant on Chinese sales to make their numbers work. Geopolitically, this is a delicate situation as Japan can’t afford to cozy up to China too closely given its security relationship with the U.S.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.