The retail sector's rough ride into the close of 2018 could provide a buying opportunity for investors seeking new ideas in the new year.

Jefferies analyst Randall Korik noted that a still strong consumer and potentially brighter macro environment ahead provides a strong rationale to make retail investment a solid resolution.

"The consumer is strong, Amazon (AMZN) - Get Report is not killing retail, the Fed is more dovish, oil down, first half of 2019 weather compares easy, free cash flow piling up, margins are moving up and consumer discretionary stocks are cheap on absolute and relative basis," he wrote outlining his multi-factor thesis. "We would use the market's late '18 air pocket to get long consumer names for 2019."

Korik noted The Gap (GPS) - Get Report , Under Armour (UAA) - Get Report , Tiffany (TIF) - Get Report , Acushnet (GOLF) - Get Report , Manchester United (MANU) - Get Report , YETI (YETI) - Get Report , Foot Locker (FL) - Get Report , Urban Outfitters (URBN) - Get Report , Boot Barn Holdings (BOOT) - Get Report , Capri Holdings (CPRI) - Get Report as well as Action Alerts Plus names Five Below (FIVE) - Get Report and Kohl's (KSS) - Get Report as his top picks. Amazon is also held by Jim Cramer's AAP charitable trust portfolio.

Cashing in on the Consumer Names

Touting his No. 1 pick, Korik remains especially positive on The Gap based on the strength of its underlying brands and their anti-cyclical nature.

"GPS trades at 10x price to earnings and sum-of-the-parts shows shares can double," he said. "We think GPS will be one of the top S&P 500 stocks in 2019 so we would aggressively buy shares."

To be sure, he noted that tariff uncertainty and market volatility could provide some problems, but that he expects "consumers to weather the storm.

Meanwhile, for more bearish bettors, L Brands (LB) - Get Report could represent a perfect opportunity to profit off of a company's pain.

"Victoria's Secret is broken, PINK is a fad with $3 billion in sales that we think get cut in half, and Bath & Body Works is at a cyclical peak with daunting compares ahead," Korik elaborated. "A debt laden balance sheet takes away equity value. We think EBITDA could fall by another ~25% and shares could fall by another ~20%. Thus we continue recommend shorting LB."

Value in Value Retailers

A subsector of retail that most experts agree is not broken is the discount retail sector.

"[Discount retail] continues to be an industry sweet spot as consumers increasingly prioritize value," Korik explained, naming Ollie's Bargain Outlet Holdings (OLLI) - Get Report and AAP name Five Below could be the best picks in the sub-sector.

His analysis echoes that of Amanda Agati, co-chief investment strategist at PNC Financial Services Group, who said that 2019 could be a big year for low-price retailers.

"We like the discount store," she told TheStreet's sister site Real Money in an interview amid holiday shopping season in 2019. "We are getting close to an inflection point [in 2019]."

She explained that value stocks and discount retailers could be set up for a strong 2019 in particular, while their more luxury-minded peers encounter problems.

"We like FIVE's nimble, opportunistic business model, and believe the company has a long pathway to growth, from under 700 units to 2,500+ over the long term," the Jefferies team explained. "We expect expanded marketing initiatives to help grow already strong brand awareness and new store productivity."

The team set a $150 price target for the stock, representing about a 50% upside from the stock's present value.

The Action Alerts Plus team provided an even more detailed analysis in a recent report initiating a larger position in FIVE.

"FIVE represents one of the best growth stories in retail, driven by its regional to national expansion plans," the team explained recently. "These new stores are typically profitable right off the bat too, as their average return on investment trends at about 150% for each store with a payback period of less than a year. All in, we believe this is a unique growth story in retail that the market must pay up even more for."

AAP senior portfolio analyst Jeff Marks said in the team's most recent members call that the "treasure hunt" experience of discount stores plays across consumer demographics and make Five Below a top pick and motivated their entry into the name at a cost basis below $100 per share.

If the market pays up anywhere near the $150 price target that Jefferies is projecting, investors like the AAP team could be finding their own bit of treasure in 2019.

Employees of TheStreet are restricted from trading individual securities.

Jim Cramer and the AAP team hold positions in Amazon, Kohl's and Five Below for their Action Alerts PLUS Charitable Trust Portfolio . Want to be alerted before Cramer buys or sells AMZN, KSS or FIVE? Learn more now.