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Zacks Value Trader Highlights: Express, Gap, Ulta Beauty, Nordstrom And Home Depot

Published 12/07/2016, 09:30 PM
Updated 07/09/2023, 06:31 AM

For Immediate Release

Chicago, IL – December 08, 2016 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: ( https://www.zacks.com/stock/news/241489/the-best-retail-stocks-to-buy-in-2017 )

The Best Retail Stocks to Buy for 2017

Welcome to Episode #60 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, Zacks Editor and co-host of the Friday Finish Line Podcast, to discuss the best, and the worst, in the retail sector right now.

The retail space covers a lot of areas from apparel, to shoes, to food, to toys and even to cars. Some areas are struggling, even though the consumer is spending. Tracey and Maddy drill down into what they are seeing out at the malls, how Black Friday and Cyber Weekend are impacting the retailers, and how you can cash in.

But there are two sides to every story. And there’s a lot not to like about the retailers right now, even with a 4.6% unemployment rate. The apparel retailers, in particular, are still having a tough time. Maddy and Tracey cover their sad tales and discuss when, or if, some of them will turn around in the new year.

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Two Retailers to Avoid Next Year

1. Express (NYSE:EXPRFree Report) is seeing decent sales trends but they are having to be extra promotional in order to get them. This is a bad sign this holiday season. It means the discounts are going to be more extreme as December goes on just to move merchandise. And don’t think the consumers don’t know it.

2. Gap (NYSE:GPSFree Report) is still trying to right the ship at its flagship Banana Republic chain. Both Tracey and Maddy think they are on the right track but not quite there yet. This is one of the cheapest retailers, with a forward P/E of 12, but Tracey is still waiting for a single digit P/E before she dives in.

Other apparel retailers that Maddy and Tracey aren’t keen on for 2017 include Land’s End and Ascena Retail, which owns Ann Taylor, The Loft, Dressbarn and Justice, among others.

But all is not lost on the retail side. There are still a handful of retailers that are doing everything right. And with consumer confidence on the rise, they are poised to cash in.

The 3 Top Retail Stocks for 2017

1. Ulta Beauty (NASDAQ:ULTAFree Report) is the top retailer in America right now. It recently saw comparable store sales of 16.7% when no one else in the industry is even doing 10%. It has posted company record comparable store sales the last 2 years. And growth is expected to continue for the next several years as it continues to open new stores. Makeup is hot. (Tracey owns ULTA in her personal portfolio.)

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2. Nordstrom (NYSE:JWN) (NYSE:JWNFree Report) continues to be on point with both its brick and mortar operations and its online segment. Earnings are expected to grow 8% next year. Analysts have been raising earnings estimates.

3. Home Depot (NYSE:HD) (NYSE:HDFree Report) has been on quite the run. But if consumer confidence stays elevated, those kitchens and new appliances will be bought. Tracey likes it even more if the shares pull back a bit as it trades with a forward P/E of 20.

Investors have to weed through the entire retail group in order to find the winners, and avoid the losers. It won’t be easy. But Tracey and Maddy give you some tips in order to be a successful retail investor in 2017.

What else should you know about the important retail sector as we head into the new year?

Tune into this week’s podcast to find out.

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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of theInsider Trader andValue Investor services. You can follow her on twitter at@TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.

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EXPRESS INC (EXPR): Free Stock Analysis Report

GAP INC (GPS): Free Stock Analysis Report

ULTA SALON COSM (ULTA): Free Stock Analysis Report

NORDSTROM INC (JWN): Free Stock Analysis Report

HOME DEPOT (HD): Free Stock Analysis Report

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