Funds are buying shares of these 8 retail stocks

By James Dennin for Kapitall.

Consumer spending accounts for 70% of the US economy as a whole, so naturally it makes sense that a top priority of economic officials is to get Americans spending more. 

One sign that efforts to prompt spending are working is that August's retail numbers climbed even more than expected at the fastest rate in four months

The main causes of the increased spending were lower gas prices and rising unemployment, although Fed Chair Janet Yellen has reiterated that wages need to climb much more for the recovery to be felt by all Americans. 

One sector that benefits the most from higher consumer spending is retail. Retailers often rely on foot-traffic and seasonality to make a lot of their money—think about how you see Halloween candy in the windows earlier and earlier each year. 

When Americans have more money to spend, a major beneficiary will be the places Americans like to shop. So with that in mind, we decided to build a screen around retailers. 

To do that, we started with the S&P Retail Select Industry Index, a universe of 120 stocks. We then narrowed that list by looking for signs of increased institutional purchasing from groups like pensions and hedge funds

This left us with eight stocks on our list. Do you think retail will have a strong holiday season going forward? Use the list below to begin your analysis, and let us know what you think in the comments. 

Click on the interactive chart to view data over time. 

 

1. American Eagle Outfitters, Inc. ( AEO): Operates as an apparel and accessories retailer in the United States and Canada. Market cap at $2.67B, most recent closing price at $13.71.  

Net institutional purchases in the current quarter at 17.4M shares, which represents about 10.3% of the company's float of 169.01M shares. 

Major Holder: Vanguard Group, Inc. (The) at a 5.10% stake. 

 

2. Barnes & Noble, Inc. ( BKS): Operates as a content, commerce, and technology company in the United States. Market cap at $1.41B, most recent closing price at $23.56.  

Net institutional purchases in the current quarter at 8.5M shares, which represents about 20.32% of the company's float of 41.83M shares. 

Major Holder: Dimensional Fund Advisors LP at a 7.24% stake. 

 

3. The Children ( PLCE): Operates as a children's specialty apparel retailer in North America. Market cap at $1.12B, most recent closing price at $51.75.  

Net institutional purchases in the current quarter at 1.7M shares, which represents about 8.15% of the company's float of 20.87M shares. 

Major Holder: Royce & Associates, LLC at a 12.21% stake. 

 

4. Family Dollar Stores Inc. ( FDO): Operates a chain of self-service retail discount stores primarily for low and middle income consumers in the United States. Market cap at $8.99B, most recent closing price at $78.86.  

Net institutional purchases in the current quarter at 6.0M shares, which represents about 6.84% of the company's float of 87.70M shares. 

Major Holder: Trian Fund Management, LP at a 7.43% stake. 

 

5. HomeAway, Inc. ( AWAY): Operates an online marketplace for the vacation rental industry. Market cap at $3.15B, most recent closing price at $33.55.  

Net institutional purchases in the current quarter at 5.5M shares, which represents about 5.9% of the company's float of 93.15M shares. 

Major Holder: Wells Fargo & Company at a 9.15% stake. 

 

6. The Fresh Market, Inc. ( TFM): Operates as a specialty grocery retailer. Market cap at $1.7B, most recent closing price at $35.01.  

Net institutional purchases in the current quarter at 5.9M shares, which represents about 14.76% of the company's float of 39.96M shares. 

Major Holder: Scopia Capital Management LLC at a 7.85% stake. 

 

7. Tuesday Morning Corp. ( TUES): Engages in the retail sale of upscale decorative home accessories, housewares, and gifts. Market cap at $817.32M, most recent closing price at $18.72.  

Net institutional purchases in the current quarter at 4.6M shares, which represents about 11.11% of the company's float of 41.40M shares. 

Major Holder: Primecap Management Company at a 14.85% stake. 

 

8. Ulta Salon, Cosmetics & Fragrance, Inc. ( ULTA): Provides prestige, mass, and salon products; and salon services in the United States. Market cap at $6.22B, most recent closing price at $96.78.  

Net institutional purchases in the current quarter at 3.3M shares, which represents about 6.02% of the company's float of 54.86M shares. 

Major Holder: Lone Pine Capital, LLC at a 8.09% stake. 

 

(List compiled by James Dennin. Monthly returns sourced from Zacks Investment Research. Insitutional data sourced from Fidelity. All other data sourced fromfFinviz.)

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