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5 Top Stocks to Make the Most of All Hallows' Eve


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Wall Street seems to have defied the eerie All Hallows' Eve by maintaining its bull run. And, the 'Halloween Strategy,' a technique in which investors start placing big bets on All Hallows' Eve after restraining in the preceding six months, gives us more optimism right now (read more: Is Halloween the Best Time to Invest? 5 Solid Buys ).

Demand for candies and costumes in the Halloween season drives sales for U.S. retailers, including discount stores. Sales of such items are expected to be healthy, courtesy of solid economic growth and high consumer confidence.

Halloween Spending to Reach $9 Billion

Yet again, Americans look to dress up, go trick-or-treating, throw parties, and splurge on their favorite candy and decorations. Total outlays for Halloween are now projected to be $9 billion, the second highest ever, according to the National Retail Federation's annual survey conducted by Prosper Insights & Analytics. The figure is also expected to be more or less close to last year's record of $9.1 billion.

The survey further showed that celebrants are planning to spend an average $86.79, up from last year's $86.13. In fact, more than 175 million Americans are planning to be part of Halloween festivities this year compared to last year.

What Will Be Driving Halloween Sales?

NRF President and CEO Matthew Shay said that "the economy is good and consumer confidence is high, so families are ready to spend on Halloween this year."

The U.S. economy has increased at an annualized pace of 3.5% in the third quarter, per the U.S. Commerce Department. In fact, the country's total output of goods and services followed an even stronger 4.2% growth in the second quarter. The two quarters, thus, recorded the fastest six-month growth in four years and is on track to hit Trump administration's annual growth target of 3%. If that happens, it would be the best yearly performance since 2005, two years before the Great Recession.

American consumers, in the meantime, are most confident about their well-being in almost two decades. The consumer confidence index had climbed to 137.9 this month, up from 135.3 in September, per the Conference Board. Thus, the key economic indicator that measures attitudes on future economic prospects registered its best reading since the fall of 2000 and is not too far from the all-time high of 144.7 reached that year.

(Source: The Conference Board )

Household optimism was largely driven by robust labor market. Needless to say, that the unemployment rate is currently at a 49-year low of 3.7%, the lowest since December 1969, according to the Labor Department.

Where Will the Money Go?

Consumers are mostly planning to spend $3.2 billion on costumes, $2.7 billion on decorations, $2.6 billion on candy and $400 million on greeting cards.

And to buy such supplies, 45% of shoppers will go to discount stores and another 35% will head toward specialty Halloween store or costume store. Furthermore, 25% will visit department stores, 24% will do online shopping and 24% will visit grocery/supermarket stores.

5 Great Halloween Treats for Investors

Here we look at five publicly traded companies from the aforesaid areas that are positioned to gain the maximum this Halloween. These companies flaunt a Zacks Rank #2 (Buy).

Burlington Stores, Inc.BURL operates as a retailer of branded apparel products in the United States. The Zacks Consensus Estimate for its current-year earnings has increased almost 1% in the last 60 days. The company's expected earnings growth rate for the current year is 42.3% compared with the Retail - Discount Stores industry's projected rise of 20.8%.

Dollar General CorporationDG provides various merchandise products in the southern, southwestern, Midwestern, and eastern United States. The Zacks Consensus Estimate for its current-year earnings has increased 0.7% in the last 90 days. The company's expected earnings growth rate for the current year is 35.9% compared with the Retail - Discount Stores industry's projected rise of 20.8%.

Target CorporationTGT operates as a general merchandise retailer in the United States. The Zacks Consensus Estimate for its current-year earnings has increased 0.2% in the last 60 days. The company's expected earnings growth rate for the current quarter is 20.9% compared with the Retail - Discount Stores industry's projected rise of 17.3%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Kohl's CorporationKSS operates as an omni-channel retailer in the United States. The Zacks Consensus Estimate for its current-year earnings has increased 0.2% in the last 60 days. The company's expected earnings growth rate for the current year is 30.3% compared with the Retail - Regional Department Stores industry's projected rise of 21.3%.

Nordstrom, Inc.JWN provides apparel, shoes, cosmetics, and accessories for women, men, young adults, and children in the United States. The Zacks Consensus Estimate for its current-year earnings has increased 3.5% in the last 90 days. The company's expected earnings growth rate for the current year is 20.6% compared with the Retail - Apparel and Shoes industry's projected rise of 9.8%.

Last but not the least, these stocks have outperformed the broader market so far this year. While Burlington Stores, Dollar General, Target, Kohl's and Nordstrom have gained 42.5%, 20.9%, 31.4%, 44.6% and 41.2%, respectively, the broader S&P 500 managed to gain just 10.6%.

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Nordstrom, Inc. (JWN): Free Stock Analysis Report

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Dollar General Corporation (DG): Free Stock Analysis Report

Kohl's Corporation (KSS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Business , Stocks
Referenced Symbols: JWN , TGT , BURL , DG , KSS



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