Credit: Shutterstock photoSpecialty Retail
First and most obviously, cheaper gas empowers the consumer, and the empowered consumer can afford to be a bit more lavish when it comes to optional spending. Oddly enough, the ongoing slow-motion collapse of Radio Shack ( RSH ) has caused certain pundits to assume things are currently bad for specialty retail, though I find it bizarre that anyone would draw conclusions about consumer habits based on the failure of one badly managed company.
There is some money going into the sector, but the excitement is mostly over a possible merger between Office Depot ( ODP ) and Staples ( SPLS ). Though a merger would be great for these companies, I'm looking elsewhere to find trades. Freed from the tyranny of expensive gasoline, consumers are going to find something to spend their money on that's a little more exciting than office supplies.
You can follow the Market Vectors Retail ETF ( RTH ) to get an overview of the sector. It is up 15% this year, with nearly all of the gains having been made since the price of oil began to fall. Investments you might consider in this sector include: Build a Bear Workshop ( BBW ), L Brands (LB) and PEP Boys (PBY).
Chart courtesy of stockcharts.com
Continue reading page 2 of this article
This article was originally published on MarketIntelligenceCenter.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
