Promotions, crimped margins and online shopping weighed on most of the group, with the exception of the really, really good companies out there.While the SPDR S&P Retail Sector ETF ( XRT) is up about 1.5% since the beginning of February, a few juggernauts in the retail sector have been much stronger.
In my earlier article, I suggested eight stocks that I thought would perform well from February to April: Amazon (AMZN), TJX (TJX), Nike (NKE), Costco Wholesale (COST), VF (VFC), Starbucks (SBUX), Michael Kors (KORS) and Macy's (M).
Since then, each stock has had a positive return, with the average return being roughly 7.5%. Compare that to the sector's 1.5% performance.
The difference might not seem huge in absolute terms, but these stocks have done about five times better than the sector. My list has vastly outperformed the broad-based index.
Equities in general have posted a monster rally in the past six trading sessions, with Wednesday's action mostly being a day to digest the big move. If the broader market can cooperate, I think many of the beaten down retail stocks will start to rise.
Is everything fixed? Is it all perfect? Will bricks and mortar enterprises overcome the barrage of online shopping? Definitely not.
It's not all fixed and it certainly isn't perfect. The big shift to online shopping is only in the early stages. But some of these names, particularly my list of suggested stocks, will continue to dominate.
You can go ahead and add Under Armour (UA) to the list as well. I feel foolish for having left it out in the first place.
Each of these stocks are up since the beginning of the month. The worst has been Amazon, up 1% from its earnings-induced selloff. Bulls will tell you it's just a buying opportunity, while the bears will try to sell you the "it's just the beginning of the massive plummet to zero" theory that's failed for the past five years.
If online shopping is going to continue its domination -- and it definitely will -- then Amazon is going to win that battle.
You could argue that the average return of 7.5% from our eight stock mini-fund is helped along by Michael Kors, which is up 25% in February due its stellar earnings results. Fine. Without our best and worst performers (Amazon and Kors), the group still returned 5.5%.
Each stock is pulling its own weight, doing its part to ensure we have solid returns. If you believe that retail has been oversold and will continue to get a bounce, these are the stocks you want.
Of course, if there is a broader market correction, it's quite likely that most, if not all, stocks will get hit. Regardless of their fundamentals, sales or growth, equities move based on emotion, at least in the short term.
But investors have to trade what's in front of them. Even in a pullback, quality almost always outperforms. The cream of the crop always rises to the top.
At the time of publication, the author was long SBUX, but held no positions in any of the other stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.