For Online Retail, GSIC and EBAY Lead the Way

For a consumer who is counting his pennies, the rising cost of filling the tank might be enough to spur online sales to race ahead of their already torrid pace. With this theme in mind, I prospected for some appropriate investment ideas and turned up one you know in eBay (EBAY - commentary - Cramer's Take) and one you might not in GSI Commerce (GSIC - commentary - Cramer's Take).

There's generally no argument that the consumer is carrying a heavy burden, including the rising cost of food and energy, increasing unemployment, decreasing home equity and, in some cases, mortgages that are adjusting higher.

We have observed gradually easing weekly same-store-sales growth rates throughout the year, with this past week's data from the International Council of Shopping Centers showing a 2.5% annual increase for the period, including Black Friday. The overall tally from Black Friday itself showed sales increased over the prior year period, but on a lower ticket per shopper.

So, if the consumer is more price sensitive this year, then rising gasoline prices could be a noteworthy driver of sales trends. Over the past decade, the penetration of the SUV into American society has established the gas guzzler within a great deal of American households. Just two weeks ago, bankrate.com showed the hypothetical cost of filling some of the most expensive tanks on the road at $100+ if gas were to reach $3.50 a gallon.

In fact, in real terms after adjusting for inflation, crude prices have already flirted with the historic high of 1980. Gasoline prices are now catching up. According to the Energy Information Administration, the national average price of gasoline had reached about $3.10 a gallon in the week ended Nov. 26, though the price had slipped about a penny from earlier this month.

So if consumers grow weary of putting miles on the old wagon, then perhaps online sales will spike even higher than their already hot pace. ComScore, an expert on the subject, projects online sales will increase 20% this holiday season (November and December), to $29.5 billion. This would represent some 24% of total forecasted online sales this year. Quoting Paris Hilton, "that's hot," but I posit that online sales could exceed that forecast if gasoline prices continue higher.

Based on this thesis, I set out to identify some likely beneficiaries, some of which I hoped might be on sale due to the market's recent slide. A quick glance at the chart below seems to indicate so. Unless you live on Mars, a few of these names you already know, but one I think might be new to you.

When thinking about online shopping, three names immediately come to mind, Amazon.com (AMZN - commentary - Cramer's Take), eBay and high-flyer Blue Nile (NILE - commentary - Cramer's Take). Unfortunately, even though all these names have given back ground along with the market of late, some are still plenty expensive in my view.

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At the time of publication, Kaminis had no positions in the stocks mentioned, although positions may change at any time.

Markos N. Kaminis, the Wall Street Greek, is currently building his own financial advisory business. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Kaminis appreciates your feedback; click here to send him an email.