3 Retailers That Could Offer Big Gains From the Holiday Shopping Rush
Christmas is just days away, and apparently, a lot of people still have a good deal of shopping to do over the next fortnight.#-ad_banner-#
According to a Consumer Reports holiday poll, conducted with three weeks left before Christmas, 36% of gift givers — approximately 66 million Americans — still hadn’t even begun their holiday shopping. The survey also revealed that most people had more than half of their shopping left to do.
This survey certainly suggests that there’s going to be a mad rush of holiday shoppers between now and Dec. 25. Moreover, the probable big buying still to come is on top of very strong Black Friday and Cyber Monday sales.
Here are three of my favorites:
Abercrombie & Fitch (NYSE: ANF)
One of the hottest retailers this season is Abercrombie & Fitch. The often controversial teen-oriented retailer has been on a wild ride this year, with the shares plunging throughout the summer on weak sales and a weaker full-year outlook.
Then, in November, the company surprised Wall Street with a huge revenue and earningsbeat due to strong sales and improved gross margins. The stock surged on the news, but I don’t think the run is over yet, especially considering the store has been a hot trend for holiday shoppers this year — shoppers that still have a lot of money to spend.
Limited Brands (NYSE: LTD)
Perhaps best known for its Victoria Secret intimate apparel stores, this women’s specialty retailer continues to see strong sales, not only at Victoria’s Secret, but also in its personal care products via the Bath & Body Works brands. The company’s strong fiscal position recently allowed it to declare a special dividend to shareholders in early December, in front of the likelihood of higher dividend taxes next year.
One aspect of the company that I think will help drive its stock price higher is that Limited Brands has embarked on plans to expand their international footprint, and to make its brands household names around the world. The company already announced that it was going to expand into growth areas such as emerging markets, including the cash-rich Middle East nation of Kuwait.
Technically speaking, I like the trading bounce seen in the shares in November, a bounce that has come back off its highs to what I now think is a great chance to pick up the stock in front of what will likely be very strong holiday rush sales.
Action to Take –> Buy LTD at the market price. Set stop-loss at $46.53. Set initial price target at $55.64 for a potential 10% gain in two months.
Lululemon Athletica (Nasdaq: LULU)
The sleek athletic apparel maker sells what’s been described as yoga-inspired clothing, and that inspiration has resonated well with consumers. The company easily bested third-quarter revenue and earnings expectations. Analysts cited a number of positives as reasons why the company did so well in Q3, including strong execution, an attractive product mix and outstanding online sales.
In 2012, the shares have been volatile, jumping to big gains early in the year, and then pulling back sharply from May to August. After a boost from August through September, the shares stabilized. However, recent earnings results, along with what should be strong holiday sales, could definitely send the shares skyrocketing again in the months ahead. With Lululemon recently breaking out above the 50-day and 200-day moving averages, now is the time to get on this stock before the real gains resume.
Action to Take –> Buy LULU at the market price. Set stop-loss at $68.84. Set initial price target at $82.30 for a potential 10% gain in two months.
3 Retailers That Could Offer Big Gains If You Buy Before the Holiday Shopping Rush