5 Retail Sector Bargains to Buy Before 2013

BALTIMORE (Stockpickr) -- Buyers are coming out in droves right now. No, I'm not talking about stock buyers for a change; I'm talking about retail.

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As consumers check boxes off of their Christmas lists, retail stocks are getting buoyed by materially higher sales. Even though economic black clouds are getting most of the attention in December, retail sales are growing fast this holiday season. The National Retail Federation is expecting holiday sales to increase by 4.1% when all of the receipts are tallied up at the end of the year -- and that's on top of actual growth of 5.6% in 2011.

That's not to say that investors have ignored retail stocks in 2012. In fact, the sector has shown serious relative strength versus the S&P 500, outperforming the broad market as household name stocks post bigger profits.

But some retailers have benefitted more than others.

And some surprising names are looking like bargains compared to the rest of the retail herd right now. That's why we're taking a look at the bargain names today.

With technicals for the retail sector in whole looking strong, this bargain bin is comprised of the other half of the coin -- fundamental valuation metrics that come in cheaper than their sector averages. In particular, we're focusing on firms who are earning more profits, bigger cash flows, and sport better book values for each dollar of share price they're trading for right now.

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Here's everything you need to know about five retail sector bargains worth buying before 2013.

Costco

At first glance, Costco (COST) doesn't look like much of a bargain: the firm trades for around 24 times earnings, and shares are around 20% more expensive today than they were on January 1. But you can't look at stocks like Costco in a vacuum -- relative to the numbers in the rest of the sector, COST is currently trading for a bargain. And given the strong trajectory of this stock right now, that's a big deal for investors who've been thinking about picking up a position in this stock.

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