A Dozen Retailers Are Bargain Buys Despite Seasonal Trends, S&P Says; Retail Shares Up
Standard & Poor's Chief Equity Strategist Sam Stovall said there are a dozen retailers whose stocks still look to be bargains despite the proximity to the holiday shopping season, bucking historical trends.
Since 1990, most retailers have recorded their highest frequency of market outperformance early in the year, specifically in March, he said. "However, since history is a guide and not gospel, and this general seasonality trend does not work for all types of retailers, it helps to get a second opinion," he added, noting S&P's assessment of fair value shows 12 retailers remain "on the bargain rack."
Ten of those retailers are in the consumer-discretionary sector: Advance Auto Parts Inc. ( AAP ), which was up 1.2% recently Monday; AutoNation Inc. ( AN ), up 1.2%; Bed Bath & Beyond Inc. ( BBBY ), up 0.6%; CarMax Inc. ( KMX ), up 0.5%; Nordstrom Inc. ( JWN ), up 0.4%; PetsMart inc. (PETM), up 0.8%; Ross Stores Inc. (ROST), up 0.2%; Staples Inc. (SPLS), down 0.1%; Target Corp. (TGT), up 0.8%; and Urban Outfitters Inc. (URBN), up 0.4%.
The remaining two are in the consumer-staples sector: CVS Caremark Corp. (CVS), up 0.2% recently Monday; and Wal-Mart Stores Inc. (WMT), up 1.3%.
The SPDR S&P Retail exchange-traded fund (XRT) was up 0.4% at $85.20 in recent Monday trading. It has climbed 36% this year and is up 40% from a year ago.