Markets

Stocks & ETFs to Profit From Cyber Monday Deals

The holiday season has started, and the burst of online deals has been paying off retailers. This is especially true as online sales jumped 14.5% year over year to a record $4.2 billion on Thanksgiving, 20% to $7.4 billion on Black Friday and 18% to $3.6 billion on Small Business Saturday.

About 40% of Thanksgiving online sales and $2.9 billion sales on Black Friday stemmed from smartphones. Notably, Thanksgiving sales surpassed $4 billion for the first time ever. The best-selling products so far include Paw Patrol and Frozen 2 toys, the Madden 20 video game and the Nintendo Switch. Top electronics include Apple laptops and AirPods and Samsung TVs.

The solid trend is likely to continue with Cyber Monday expected to hit a record $9.4 billion in online sales, up 19% from the last year’s sales of $7.9 billion. Per National Retail Federation, more than 68 million Americans plan to take advantage of deals and promotions this Cyber Monday (read: Retail ETFs Up on Q3 Earnings).

According to the study from Deloitte, about 53% of people will rely on Cyber Monday for discounts. Of these, Gen Z shoppers are the majority with 65% intending to grab the deals, followed by 61% of millennials, 49% of Gen X consumers, 47% of baby boomers and 44% of seniors.

Hot Retailers

Online behemoth Amazon.com AMZN, which captured about one-third of online sales on Cyber Monday last year, remained the hottest retailer. A study by Bain & Co projects that Amazon will capture a bigger share, about 42%, of total online sales this holiday season.

The company kicked off Cyber Monday deals on Nov 30, which will continue through Dec 2, with new deals all day, every day and deeper discounts than ever on categories from fashion to toys, electronics, home, luxury beauty, books, active lifestyle and many more. Some unique deals are Echo Dot for just $22 or Fire TV Stick with Alexa Voice Remote for just $19.99, $100 off on PS4 PRO, up to 45% off on HAUS LABORATORIES by Lady Gaga Limited Time kits, up to 80% discount on Kindle bestselling books, 30% on select Hasbro Games, NERF, FurReal toys, and up to 35% off on Lacoste clothing, shoes, accessories, and home. The stock has a Zacks Rank #3 (Hold) and a VGM Score of C.

Brick-and-mortar chains have also become aggressive in chasing online customers. Wal-Mart WMT kicked off Cyber Monday deals at 12:01 a.m. Some of the best deals are 10.2-inch iPads for less than they were on Black Friday, Ring Video Doorbell offers, discounts on AirPods 2 and AirPods Pro, iPad Pro tablets at their lowest prices ever, hidden offers on Apple Watch Series 5 models, the best prices on Instant Pots, and deep discounts on Nintendo Switch games, killer PlayStation 4 and Xbox One deals. Wal-Mart has a Zacks Rank #3 and a VGM Score of B (read: Gearing Up for Holiday Season: Amazon Versus Walmart ETFs).

Target TGT launched its Cyber Week deals one day early this year with digital doorbusters available on Target.com on Dec 1 and Dec 2. Some of the hottest deals are $80 off on 7th generation iPads, 30% off on apparel, outerwear, and shoes, $219.99 for TCL 43-inch TV plus a $20 Target GiftCard with purchase (originally $329.99), 40% off on bed and bath and significant savings on toys, including brands like Hot Wheels, Barbie and Disney. All these deals will run through Cyber Week. Meanwhile, department store Macy’s M has unveiled steep discount on more than10,000 items from home goods and kitchen appliances to designer apparel and high-end beauty products in a two-day sale until Dec 2. Target has a Zacks Rank #1 (Strong Buy) and a VGM Score of B, while Macy’s has a Zacks Rank #3 and VGM Score of D. You can see the complete list of today’s Zacks #1 Rank stocks here.

Several other retailers like Best Buy BBY, Gap GPS, J.C. Penney JCP, and Kohl’s KSS are also drawing investors’ attention with sizzling deals on most products. Best Buy has a Zacks Rank #2 (Buy) while Gap has a Zacks Rank # 5 (Strong Sell). The rest two have a Zacks Rank #3 (see: all the Consumer Discretionary ETFs here).

ETFs on a Roll

While investing in any of these stocks could reward investors throughout Cyber Week, a diverse approach in a basket form can also be a great choice. For this, investors can splurge on the e-commerce corner of the broad retail/technology industry.

Some of the attractive ETF deals are Amplify Online Retail ETF IBUY, ProShares Online Retail ETF ONLN, ProShares Decline of the Retail Store ETF EMTY, ProShares Long Online/Short Stores ETF CLIX, First Trust Dow Jones Internet Index FDN and PowerShares Nasdaq Internet Portfolio PNQI.

IBUY offers global exposure to companies that derive 70% or more revenues from online and virtual retail while ONLN is exclusively focused on retailers that principally sell online. EMTY and CLIX are designed to benefit from the changing retail landscape from physical stores to online. Meanwhile, FDN and PNQI provide exposure to the Internet space. FDN has a Zacks Rank #3 and PNQI has a Zacks ETF Rank #2 (read: Shop Online ETFs & Stocks for Black Friday & Beyond).

Other ETFs like SPDR S&P Retail ETF XRT, VanEck Vectors Retail ETF RTH, S&P SmallCap Consumer Discretionary Portfolio PSCD, and Vanguard Consumer Discretionary ETF VCR also make compelling picks. XRT and RTH target the retail sector, while PSCD and VCR offer broad exposure to the consumer discretionary space. XRT and VCR have a Zacks ETF Rank #2 while others have a Zacks ETF Rank #3.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report

SPDR S&P Retail ETF (XRT): ETF Research Reports

Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports

VanEck Vectors Retail ETF (RTH): ETF Research Reports

Invesco NASDAQ Internet ETF (PNQI): ETF Research Reports

Amplify Online Retail ETF (IBUY): ETF Research Reports

Invesco S&P SmallCap Consumer Discretionary ETF (PSCD): ETF Research Reports

First Trust Dow Jones Internet Index Fund (FDN): ETF Research Reports

The Gap, Inc. (GPS): Free Stock Analysis Report

Best Buy Co., Inc. (BBY): Free Stock Analysis Report

Walmart Inc. (WMT): Free Stock Analysis Report

Target Corporation (TGT): Free Stock Analysis Report

Macy's, Inc. (M): Free Stock Analysis Report

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

J. C. Penney Company, Inc. (JCP): Free Stock Analysis Report

Colgate-Palmolive Company (CL): 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.

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