Valentine's Day has become synonymous with exchanging chocolates, precious metals and gifts. People start searching for innovative gift ideas long before the event.
But this year, love is lost it seems if we go by the data provided by the National Retail Federation (NRF) earlier this month. American spending on Valentine's Day this year is expected to drop 7.6% to $18.2 billion, following a decade-long jump in spending. U.S. consumers are likely to spend an average $136.57, lower than last year's record-high $146.84.
If consumers are being so budget-conscious even in an improving economy, why not be a little finance-minded and gift our valentines some ETFs or stocks this year? In this regard, we describe below ETFs and stocks to love or hate this Valentine's Day.
A Dark Valentine Day for Cocoa ETFs; Go for Candies Instead
A big share of Valentine's Day spending is on candies, teddies, flowers, wine and champagne. As per the National Retail Federation, around 50% of people plan to spend on candyies or chocolates. Another source says that about 94% want to have candy and chocolate.
This year cocoa - the key ingredient of chocolates - is a boring bet from an investing point of view. As per CNBC , cocoa prices lately touched a four-year low. Ample supplies on favorable weather and falling demand spurred by health-consciousness among consumers mainly hurt cocoa prices this year. In the U.S. - the biggest chocolate market globally - retail sales growth of chocolate candy hardly improved in the last two years (read: Why Cocoa ETFs are Hitting 52-week Low? ).
In such a situation, it is not the best time to gift cocoa ETFs like iPath Bloomberg Cocoa SubTR ETNNIB (down 11.9% this year as of February 13, 2017) and iPath Pure Beta Cocoa ETNCHOC (down 9% this year). So forget the ingredient and go for the final product candy and bet on confectionary products maker The Hershey Company (HSY). The stock has a Zacks Rank #2 (Buy).
Precious Metals Look Dull
As we know, diamonds or platinum ornaments or cufflinks are some of the favored V-Day gifts. Gold bullion ETF SPDR Gold SharesGLD has added 6.6% this year on market volatility caused initially by President Trump's debatable plans and policies on trade and immigration.
However, the metal dropped in recent sessions as Trump talked about tax cuts and the market and greenback rallied all over again. This weighed on overall commodity investing. As a result, GLD, iShares Silver TrustSLV , ETF ETFS Physical Platinum PPLT and ETFS Physical PalladiumPALL lost about 0.7%, 0.8%, 1.21% and 1%, respectively, on February 13, 2017 (read: How Will Gold Mining ETFs Fare this Earnings Season? ).
However, since consumers plan to devote $4.3 billion on jewelry, Tiffany & Co.TIF - a Zacks Rank #3 (Hold) fine jewelry company with Value and Growth score of 'C' - may be a feeble bet.
Wine ETF Looks to Be a Good Bet
The whiskey and spirits sector, a niche within the consumer discretionary space, has been on an uptrend. The industry is known to have shown steady demand amid changing market conditions. So, one can play the trend by investing in Spirited Funds/ETFMG Whiskey&Spirits ETFWSKY or Zacks Rank #2 stock Ambev S.A. ABEV . The fund is up 4.1% so far this year (as of February 13, 2017) while ABEV has added about 11.4% (read: Tap the Growing Whiskey & Spirit Market with This New ETF ).
Discount Retailer to Save the Event
As per NRF, 35% of consumers plan to shop at department stores while 32% do it at discount stores and 27% target online shopping. As a result, Zacks Rank #2 discount retailers like Dollar Tree Inc.DLTR , Fred's Inc.FRED and Ross Stores Inc.ROST can be nice bets for the occasion. With these, VanEck Vectors Retail ETF RTH) and SPDR S&P Retail ETF XRT - each with a Zacks Rank #1 (Strong Buy) - emerge as good V Day ETF gifts.
And who can forget online retail ETF - the most important medium of shopping? In-store purchases have been hitting the brakes lately with surging demand for technologies. This makes Amplify Online Retail ETFIBUY an intriguing ETF deal for Valentine's Day (read: ETFs & Stocks Unfazed by Softer December Retail Sales ).
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