Regardless, there are a few plays that will be winners this holiday season for consumers that are spending less. I do expect these companies to outperform in the retail sector this holiday season. Here are your possible plays this holiday season:
- Best Buy (BBY): Best Buy is a top electronics retail play that does expect a huge holiday season. The company was upgraded today by Barclays, who share the same opinion, that Best Buy will outperform this holiday season. The rose their target to $51 and remained their outlook at overweight. Best Buy was up 3% today on the news.
- Nordstrom (JWN): Nordstrom is a higher end retail play that is currently pretty cheap with a P/E of 18, ROE of 33% and a dividend yield of 1.9%. Nordstrom has done a pretty good job of staying ahead of the pack in the higher end retail. Look for JWN to capitalize on its sales momentum.
- Wal-Mart (WMT): WMT is a great low cost retailer especially in this economic climate. Wal-Mart has great deals and savings that should be very attractive for the frugal consumer. Wal-Mart is the largest offline retailer and they should easily post great numbers this holiday season. The stock is very cheap at the moment with a P/E of 13, ROE of 22%, P/S of .47. I like WMT.
- Amazon (AMZN): With a growing number of consumers looking for better deals online and skipping the crowds at the malls, Amazon, the largest online retailer, will be an obvious choice for consumers. Amazon and Wal-Mart are in a huge price war this holiday season but I don't see it being a big deal because there will not be a big enough price difference to determine a clear "winner". They will both be winners in their right. Amazon will be the winner of online retail.
Disclosure: Long BBY
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