4 Growth Picks In Retail That Surged More Than 20% This Year

“Wake me up when September ends” may not hold true for stoic investors who are always on their toes to pounce on lucrative market opportunities. Notably, the market is on a bull run and is likely to sustain the trend, unless any unforeseen event occurs. This is well evident from the year-to-date performance of major indices including the Dow Jones Industrial Average, Nasdaq and S&P 500 that have gained about 12.7%, 16.8% and 11.1%, respectively, so far this year.

While the market appears to be on a bullish note, one can’t ignore the setbacks from back-to-back hurricanes — Harvey and Irma and the escalating geopolitical tensions with North Korea. Meanwhile, the Fed officials kept the interest rate unchanged but raised their GDP growth rate forecast for the year from 2.1% guided in June to 2.2%. Also, the adverse impact from the deadly hurricanes is a short-term boulder, as construction activities and business investments are likely to steam up in the later part of the year. This instills confidence in the economy’s growth prospects.

So, if the economy defies the prevailing concerns, it will only augment investors’ risk appetite. The buoyant market provides an ideal opportunity to boost your portfolio by adding growth stocks. Among the 16 Zacks categorized sectors, we are focusing on Retail-Wholesale. The sector has gained 18.6% so far in the year and has comfortably outperformed the S&P 500 index.



Retail Space Rides on Favorable Indicators

The retail space has been riding on steady job additions, lower unemployment levels and a modest improvement in consumer spending.

While retailers have long been battling challenges related to evolving consumer preferences, they are leaving no stone unturned to keep pace with the changing consumer demand. Incidentally, most retailers have adopted the omni-channel mantra, and also recorded solid bumps in e-commerce sales this year. Thus, we believe that retailers are likely to continue to reap benefits from their omni-channel and store optimization strategies.

Solid Bull-Run, Favorable Growth Score Offer Double Treat

All said, we suggest investors to strike the iron when hot. To make the most out of this opportune moment, we have handpicked four top-ranked stocks from the retail space that have gained more than 20% this year. Backed by sound fundamentals and impressive past records, these stocks won’t let you down.

Moreover, these stocks carry a favorable Growth Style Score, thereby doubling the treat. Well, our research shows that a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best opportunities in the investing space. You can seethe complete list of today’s Zacks #1 Rank stocks here.

4 Retail Picks You Can’t Miss

Pennsylvania-based, Five Below, Inc. (NASDAQ:FIVE) is a solid bet. The Zacks Rank #2 company has a spectacular earnings surprise history. The company’s bottom line surpassed the Zacks Consensus Estimate for eight consecutive quarters. We commend Five Below’s brand strength, comfortable pricing and efforts to expand e-commerce operations. Driven by these efforts, the company has surged 25.3% so far this year, faring way better than the industry’s 14% slump. Well, Five Below flaunts a Growth Grade of A, with a long-term earnings growth rate of 28.5%.

Investors can also count on Herbalife Ltd. (NYSE:HLF) , which has seen its stock soar 40.5% year to date against the industry’s 0.2% dip. This Grand Cayman-based nutrition company has a robust geographical reach. Moreover, the company has topped earnings estimates consistently in the trailing four quarters, with an average beat of 25.1%. Moreover, Herbalife possesses a Growth Score of A.

You may also consider Conn's, Inc. (NASDAQ:CONN) , a specialty retailer of durable consumer goods and related services, headquartered in Texas. The stock flaunts a Zacks Rank #1 and has a Growth Score of B. The company’s bottom line outperformed the Zacks Consensus Estimate considerably in the trailing four quarters and has a long-term growth rate of 18.5%. So far in the year, the company has displayed a fabulous bull run, with its shares up 72.3%, beating the industry’s 23.6% growth.

Finally, we suggest taking a look at Rush Enterprises, Inc. (NASDAQ:RUSHA) . This integrated retailer of commercial vehicles and related services delivered an average positive earnings surprise of 27% in the trailing four quarters and sports a Zacks Rank #1. Moreover, the company has emerged as a strong contender with a long-term earnings growth rate of 15% and a Growth Score of A. With its operations spread over more than 15 states, the Texas-based company has advanced 34.3% this year, comfortably outperforming the industry’s marginal growth of 0.2%.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Rush Enterprises, Inc. (RUSHA): Free Stock Analysis Report

Conn's, Inc. (CONN): Free Stock Analysis Report

Herbalife LTD. (HLF): Free Stock Analysis Report

Five Below, Inc. (FIVE): Free Stock Analysis Report

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Zacks Investment Research