5 Beneficiaries Of The Black Friday Craze

When investors are not distracted by FedEx (FDX) and UPS (UPS) being probed on drug shipments with online pharmacies, these shipping companies offer insight on Black Friday shopping. FedEx handles around 8 million packages a day. ShopperTrak forecast sales to rise between 3-4% during the holiday season. The International Council of Shopping Centers also has a 3% sales growth forecast. National Retail Federation is even more optimistic, forecasting a 4.1% increasing and spending of $586 billion in total.

Besides retailers, FedEx is sure to benefit on Black Friday sales and the holiday season. FedEx is expecting December 10 to be the busiest day for shipping. The company expects to move 19 million items that day, 10% higher than in the previous year.

Now that the U.S. elections are completed, the upcoming holiday season will be in focus. It could be enough to distract from that other headline…the fiscal cliff.

Top Holiday Shipping Items

Similar to previous years, FedEx should expect personal electronics, luxury goods, and apparel to be the most popular items shipped. The online e-tailors will be the retailers shipping the majority of these items.

Online e-Tailor Growth

Over the long term, online retailing is expected to keep growing. eMarketer thinks online sales will grow 16.8% this year compared to last. In 2011, online sales grew 16.5%. In 10 to 15 years, online sales could be between 50% and 80% of the entire retail activity.

Business Section: Investing Ideas

Shipping companies are only pricing in conservative holiday sales, as judged by their POP (Price of Profit). FedEx has a POP of 13, while UPS has a POP of 14. In the last month, shares in both companies are down around 5% on average:

Online e-tailors poised to benefit include:


1. Amazon.com Inc. ( AMZN, Earnings, Analysts, Financials): Operates as an online retailer in North America and internationally. Market cap at $102.02B, most recent closing price at $225.23. Trading with a POP of 70+, investors are already pricing in substantial future growth


2. eBay Inc. ( EBAY, Earnings, Analysts, Financials): Provides online marketplaces for the sale of goods and services, as well as other online commerce, platforms, and online payment solutions to individuals and businesses in the United States and internationally. Market cap at $61.15B, most recent closing price at $47.26. eBay has a POP of 20. The company is making substantial earnings from its PayPal division


3. Google Inc. ( GOOG, Earnings, Analysts, Financials): Google is the world’s most popular search engine. Market cap at $212.66B, most recent closing price at $647.18. Consumers will need to use Google’s map service and search engine for shopping


Gadget stores to look at are:

4. Best Buy Co. Inc. ( BBY, Earnings, Analysts, Financials): Operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. Market cap at $4.63B, most recent closing price at $13.75. Shares are at another 52-week low. The plan to privatize may not pan out.


5. Wal-Mart Stores Inc. ( WMT, Earnings, Analysts, Financials): Operates retail stores in various formats worldwide. Market cap at $228.68B, most recent closing price at $68.03.



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Image source: SEHI Magazine.