This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Retail Stocks Jolly With Holiday Cheer

NEW YORK ( TheStreet) -- This holiday season consumers are looking for electronics, value-added deals and anything they can purchase online or through their mobile devices.

According to the National Retail Federation, holiday retail sales will rise 3.9% over 2012 to $602.1 billion, fueled by consumers' demand for larger ticket items as well as the growing online shopping experience. However, fiscal concerns as well as any lasting effects of the government shutdown could temper holiday spending, the trade association said.

A few weeks ago Morgan Stanley analysts predicted that the 2013 holiday season would be the worst season for retailers since 2008, the height of the recession.

"Debt dynamics, gains in wealth, and lower gas prices have lifted consumer buying power ahead of the 2013 holiday shopping season, but Congressional discord and balance sheet priorities cloud the outlook. While the ability to spend more is apparent, willingness remains the key question," Morgan Stanley analysts wrote in a retail industry research note on Oct. 31.

As retailers struggle to get shoppers in the door, the Morgan Stanley note predicted that margins would erode this season given the high promotional environment by retailers.

"We expect specialty retail [fourth quarter] gross margins to decline 66 bps [year over year], on average," the note said. "We predict [<b>J.C. Penney</b>] will offer extremely deep discounts early in the season to ensure it achieves its positive comp guidance, putting pressure on other retailers to do the same. Also, with six fewer shopping days between Thanksgiving and Christmas, retailers could push the promotional 'panic button' earlier than needed, putting margins at risk."

Last week's BDO USA survey forecast that the consumer electronics category will likely be the top-performing category once again this holiday season as well as the most discounted. The survey findings are from the most recent BDO Retail Compass Survey of CMOs, which polled 100 chief marketing officers at leading U.S. retailers in September and October.

Another bright spot are gift cards, which continue to be "a very popular option for busy shoppers and discerning family and friends on holiday shopping lists," the survey found. Gift card sales are expected to rise 6.9%, according to BDO.

The stocks on this list have some very common themes: With the new gaming consoles hitting the shelves later this week, more than a few companies are expected to benefit from added sales. Online commerce continues to perform above and beyond as well as the trend for strong bargain hunting by wallet-conscious consumers.

TheStreet presents its top retail stocks this holiday season.
1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AMZN $499.31 -2.60%
SALE $8.64 -4.00%
AAPL $109.42 -3.00%
FB $87.47 -2.20%
GOOG $601.43 -2.70%

Markets

Chart of I:DJI
DOW 16,099.00 -429.03 -2.60%
S&P 500 1,921.64 -50.54 -2.56%
NASDAQ 4,660.99 -115.5180 -2.42%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs