With sales expected to rise this holiday season, retail stocks are worth considering but mainstream retailer stocks are not looking so hot this year. The Full-Court Finance podcast recently considered four retailers in sports and leisurewear that the podcasters feel are looking good. Though they stretch the “sports-based retail” thesis a bit, it gives investors a fresh frame of consideration during a somewhat chaotic period. Of course, Jim Cramer begs to differ and goes bargain hunting for beaten down retail giants.
The logic of investors is always interesting to consider. When Macy’s and Walmart reported strong earnings, it was time for profit taking and their stock prices dropped. Target’s sales were up and Kohl’s beat analyst expectations but it was time to sell. Rising consumer confidence and the likelihood of increased sales seemed to do nothing for big retailers set to benefit from that confidence and the big indices all fell amidst talk of bear markets.
Fully behind sports retailers
For the Full-Court Finance podcast, the first rumblings of investor discontent prior to Black Friday led them to look away from major retailers to focus on more specialized operations with sports-related goods. They decided it was time to consider buying Canada Goose Holdings Inc (TSE:GOOS, NYSE:GOOS), Crocs, Inc. (NASDAQ:CROX), Lululemon Athletica Inc. (NASDAQ:LULU) and Columbia Sportswear Company (NASDAQ:COLM).
Their first pick, Canada Goose, is ranked a Zacks Strong Buy due to upward earnings estimate revisions and strong expectations for growth. Plans to move into the China market, which is huge though filled with potential counterfeiters, are helping push its stock up. Full-Court Finance feels their sales growth means there is room for more stock price growth.
Crocs is a stretch on the sports theme but Full-Court Finance ties it in with the concept of what athletes wear when they relax. Well, anything to put a great stock under the spotlight. It, too, is a Zacks Strong Buy and its stock price has risen considerably as others have fallen.
Lululemon joins the strong buy crowd. It seems to have gotten past a wide range of controversies in past years to return to popularity. Now, they are taking market share from such giants as Under Armour, Adidas and even Nike. Though their stock has seen some dips, Full-Court Finance considers those buying opportunities.
(Featured image by bargainmoose via Flickr. CC BY 2.0)