The Top Retail Stocks To Buy For 2018

• (0:25) - Retail Roundup: Black Friday & Cyber Monday
• (3:10) - Top-selling Products
• (10:10) - Out of Stock and Back Ordered Products
• (16:00) - Where to Invest In The Retail Sector
• (24:00) - Record High Online Transactions
• (27:20) - Retail Takeaways: Podcast@Zacks.com

Welcome to Episode #109 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Maddy Johnson, a Zacks Editor and co-host of the Friday Finish Line podcast, to discuss the Black Friday to Cyber Monday retail extravaganza and which retailers look to have an edge heading into the new year.

The strong economy and consumer confidence are working their magic.

On Black Friday, online transactions were up 17% year-over-year to a record $5 billion.

Similarly, on Cyber Monday, online sales also jumped 17% year-over-year to a record $6.6 billion.

Black Friday Breaks Online Sales Records

Tracey and Maddy discuss what they saw in the Chicago area on Black Friday and which products have been the hottest so far. (Hint: if you haven’t bought that Instant Pot yet, you may be out of luck.)

Electronics, especially Apple (NASDAQ:AAPL) products, are also hot products.

Amazon announced that it sold millions of Alexa devices from Black Friday through Cyber Monday. Its Echo Dot and Amazon Fire TV Stick with Alexa Voice Remote were their best-selling products in all categories.

But with consumers finally opening their wallets, the retailers may not be as doomed as many investors had believed.

Which retail stocks should you own heading into 2018?

The Top Retail Stocks for 2018

1. Amazon (NASDAQ:AMZN) continues to be the king of online retail. It now has a big brick and mortar business thanks to Whole Foods but no one can compete with Amazon Prime.

2. Home Depot (NYSE:HD) had some of the best comparables in the business last quarter, posting a same-store-sales comp of 7.9%, with the US seeing 7.7%. Yes, the hurricanes, fires and earthquakes added to sales, but Home Depot’s comps were strong even before the natural disasters.

3. Gap (NYSE:GPS) is finally seeing some progress in turning around its struggling Banana Republic brand. Additionally, Old Navy continues to outperform. Apparel looks to be gaining momentum this holiday season.

4. Macy’s (NYSE:M) is cheap, with a forward P/E of just 6.3. It appears to have had a solid Black Friday weekend as it was on track to sell over a million coats, sweaters and fleece. If apparel is gaining strength among consumers, Macy’s stands to gain.

5. Ulta (NASDAQ:ULTA) will soon be reporting its earnings but is one of the few retailers that is doing double digit comparables nearly every quarter. Last quarter, it gave more conservative guidance which spooked investors. But the beauty segment remains strong and Ulta is one of the top names in that business with its outstanding Ultamate rewards program.

JC Penney and Kohl’s also reported strong online sales over the Thanksgiving period.

Is the worst over for the department stores?

Under Armour and Nike (NYSE:NKE) stocks have had a rough time of it in 2017. Is it time to consider the sports apparel and shoe makers again?

Find out on this week’s podcast.

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