Five Big-Name Consumer Stocks; Buy or Sell?

The holiday shopping season is upon us with just 35 days until Christmas–and Black Friday just over a week away. What’s interesting is that even with the upcoming holiday sales, prices on consumer goods are rising. In fact, the Labor Department just reported that its Consumer Price Index (CPI) increased 0.2% in October, after two-straight months of declines.

Digging deeper into last month’s figures, energy prices and food prices both increased. Cereal and baked goods saw its biggest increase since August 2011. Apparel prices, though, slipped last month. Excluding food and energy costs, core CPI still increased 0.2% in October, mainly due to a 0.3% rise in rentals and a 0.7% increase in medical costs.

So it’s unlikely that last month’s CPI increase will have much of an impact on Americans’ shopping habits this holiday season. What could impact Americans’ shopping is the fact that some big-name companies are keeping their doors closed on Thanksgiving, refusing to start their Black Friday sales until, get this, Black Friday.

Just this week, the Huffington Post reported that Costco Wholesale Corporation (COST), Nordstrom (JWN), Barnes & Noble (BKS), Home Depot (HD) and Lowe’s (LOW) are among 20 stores that will remain closed on Thanksgiving day. Some believe this could hurt these companies’ full-year 2015 sales, while others are praising these companies for standing up and giving their employees the holiday off.

So before you start your holiday “stock” shopping, let’s take a closer look at these five companies. According to Portfolio Grader, three of these five stocks are good buys today:

Company Quantitative Grade Fundamental Grade Total Grade Advice
Home Depot (HD) A B A Strong Buy
Costco Wholesale Corp. (COST) A C B Buy
Lowe’s (LOW) A B B Buy
Nordstrom (JWN) F C D Sell
Barnes & Noble (BKS) D C D Sell

Look a little further into these three buys and you’ll discover that all three have solid earnings and sales growth prospects. In fact, analysts have revised COST’s earnings estimates $0.02 higher in the past two months, and the company is forecast to post 4.5% annual earnings growth and 3.4% annual sales growth in the current quarter.

The picture is even brighter for Lowe’s and Home Depot. Analysts are expecting LOW to report 32.2% annual earnings growth and 4.6% annual sales growth in the third quarter (to be announced tomorrow, November 18)–and estimates have also been revised $0.02 higher recently. And just this morning, Home Depot announced that sales increased 6.4%, while profits grew 12.2% in the third quarter.

So if you’re looking for a few consumer plays this holiday season, you may want to consider Costco, Home Depot and Lowe’s.


Louis Navellier

Louis Navellier

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