20 Recommendations For The Retail Rebound

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

Louis Navellier

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