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Published on February 13, 2017 at 11:15 am by Modest Money in News ,Stock Analysis
After a disappointing holiday season for retailers, many have started 2017 under pressure. Almost no one was spared as reports surfaced talking about how retail sales were down for the season. While it was bad, this drop is a buying opportunity if you can spot the strong players in this industry.
The problem is that many of the retailers have issues, so finding the stocks to buy is a little tougher than usual. Luckily, this post will highlight 5 hot retail stocks that you should consider adding to your portfolio now, before they become too expensive.
5 Hot Retail Stocks To Buy Today
#1. Target Corporation (NYSE:TGT )
Since its November high, Target Corporation (NYSE:TGT) stock is down close to 20%. But this doesn t mean you should run from the stock. In fact, you should look at this as a buying opportunity.
Yes, consumers are moving away from brick-and-mortar retail stores and doing more of their shopping online. Target Corporation (NYSE:TGT) knows this. They are spending more money on beefing up their technology and updating their supply chains instead of building more stores. In fact, they are committing close to $2 billion a year to grow this side of the business. While this won t result in profits overnight, it will have an impact moving forward.
With a P/E ratio of 11 and a dividend yield of close to 4%, now is the time to buy Target. As consumer confidence remains high, Target s stock price should recover quickly. And if consumer confidence drops, Target Corporation (NYSE:TGT) will be scathed from most of the wrath since they are a discount retailer.
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#2. Home Depot Inc (NYSE:HD )
If you bought Home Depot Inc (NYSE:HD) back in October, you were a smart investor. It is pricey now, trading at 22 times earnings, but it has more room to grow. The housing market in the U.S. is still warm, incomes are rising and consumer confidence is high. This means that people will be remodeling and updating their homes.
But what if the U.S. economy enters into a recession? Home remodeling will slow and this will hurt Home Depot Inc (NYSE:HD). But economic signs are not pointing in this direction, so for now, Home Depot Inc (NYSE:HD) is a stock worth adding to your portfolio.
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#3. Amazon.com, Inc. (NASDAQ:AMZN )
Love them or hate them, Amazon.com, Inc. (NASDAQ:AMZN) is here to stay and will be one of the hot retail stocks as long as they keep innovating. They crushed the holiday season while other retailers performed poorly. However we don t know just how well Amazon did yet. As with holiday seasons of the past, Amazon didn t release hard numbers. But all indicators point to a strong holiday season for the retailer.
The fact that Amazon.com, Inc. (NASDAQ:AMZN) continues to sell more goods is one reason to buy the stock. But there are more. According to research. half of U.S. households subscribe to Amazon Prime and half of online shopping searches start with Amazon. In other words, unless some other retailer has an unbelievable price, faster and cheaper shipping, and a better return policy, people are going to buy from Amazon.com, Inc. (NASDAQ:AMZN).
The stock looks pricey at over $800 a share, but when you look at how the company continues to grow and innovate, there is no waiting for a pullback with this stock. You get in when you can and enjoy the ride.
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