As a consumer, you have a lot of power: Consumption accounts for over two-thirds of economic growth. By being an active participant in the economy, you do your part to help the recovery. Isn’t it time that you benefit from this same powerful trend as an investor? From where I’m standing, it’s a no brainer: In recent months retail sales, consumer spending and consumer confidence have been improving by leaps and bounds.
Most recently, the University of Michigan reported that its final consumer confidence reading shot up to 84.1 in April, up from only 80 in March. This was a big surprise, since economists were expecting consumer confidence to come in at 82.8. As a result, consumer confidence is now at its highest reading since July and consumers are expected to spend up a storm.
Another sign that consumer spending is revving up was the Commerce Department’s recent report that consumer spending rose 0.9% in March, outpacing personal income, which rose 0.5%. Clearly, consumers are now starting to spend more, which is simply wonderful news for both Main Street and Wall Street.
But if you’re looking to cash in on this trend, a word to the wise: I’m not saying that you should just go up and load up on retail stocks. Not all retailers and retail stocks are created equally—while some are still stuck in the mud, there are some retailers that are knocking the socks off Wall Street.
The best advice I can give is to know how to tell between the winners and the losers. A great place to start would be my PortfolioGrader tool, where I assign letter grades to more than 5,000 stocks and highlight the best stocks by sector, fundamentals, and volatility ranking. Today let’s put Portfolio Grader to work and pick out 20 of the nation’s top retailers. You’ll see that I classify five as “Buys,” five as “Cautious Buys,” five as “Holds,” and five as outright “Sells.” Let’s take a look:
Retailers To Buy Now
| Symbol | Company Name | Industry | Quantitative Grade | Fundamental Grade | Total Grade |
| AAP | Advance Auto Parts, Inc. | Specialty Retail | B | B | B |
| FL | Foot Locker, Inc. | Specialty Retail | B | B | B |
| NFLX | Netflix, Inc. | Internet & Catalog Retail | B | B | B |
| PCLN | Priceline Group Inc | Internet & Catalog Retail | B | B | B |
| RAD | Rite Aid Corporation | Food & Staples Retailing | A | B | A |
Five Retailers That Are Cautious Buys
| Symbol | Company Name | Industry | Quantitative Grade | Fundamental Grade | Total Grade |
| CVS | CVS Caremark Corporation | Food & Staples Retailing | A | C | B |
| EXPE | Expedia, Inc. | Internet & Catalog Retail | C | B | B |
| MW | Men’s Wearhouse, Inc. | Specialty Retail | B | C | B |
| ODP | Office Depot, Inc. | Specialty Retail | B | C | B |
| WAG | Walgreen Co. | Food & Staples Retailing | B | C | B |
Five Retailers To Hold
| Symbol | Company Name | Industry | Quantitative Grade | Fundamental Grade | Total Grade |
| DKS | Dick’s Sporting Goods, Inc. | Specialty Retail | D | C | C |
| DSW | DSW Inc. | Specialty Retail | D | C | C |
| KSS | Kohl’s Corporation | Multiline Retail | C | C | C |
| M | Macy’s Inc | Multiline Retail | C | B | C |
| WSM | Williams-Sonoma, Inc. | Specialty Retail | C | C | C |
Five Retailers To Sell Right Away
| Symbol | Company Name | Industry | Quantitative Grade | Fundamental Grade | Total Grade |
| AMZN | Amazon.com, Inc. | Internet & Catalog Retail | D | C | D |
| ANF | Abercrombie & Fitch Co. | Specialty Retail | F | D | F |
| FIVE | Five Below, Inc. | Specialty Retail | D | B | D |
| SHLD | Sears Holdings Corporation | Multiline Retail | D | C | D |
| TGT | Target Corporation | Multiline Retail | F | D | F |
If you’d like more guidance in picking the best of the best retail and consumer-driven stocks, my Blue Chip Growth advisory newsletter could be just what you’re looking for. Currently I’m recommending three top stocks—two U.S. apparel suppliers that are excelling where other competitors are struggling, and the leading online discount retailers in one of the world’s fastest growing economies. You may click here to learn more about joining Blue Chip Growth risk-free.
Sincerely,
Louis Navellier