Even amid rising inflation and supply chain bottlenecks, the retail industry has been witnessing a consistent rise in sales over the past few months, owing to an improving job market, pent-up demand for discretionary products, and heightened consumer spending ahead of the holiday season. Therefore, I recommend betting on fundamentally sound retailers Best Buy (BBY),The Kroger Company (NYSE:KR),Casey's General Stores (NASDAQ:CASY), and PriceSmart (NASDAQ:PSMT). They each look undervalued at their current price levels. Let’s discuss.Despite the resurgence of COVID-19 cases, rising inflation, a slowdown in third-quarter GDP growth, and supply chain logjams, retail sales rose 0.9% month-over-month in August, 0.7% in September, and 0.9% in October.
With declining jobless claims each week and rising consumer spending ahead of the holiday season, the retail industry is expected to continue registering sales growth in the coming months. Indeed, the National Retail Federation (NRF) forecasts holiday retail sales to rise between 8.5% -10.5% during November and December.
Considering the fundamental strength of prominent retail companies Best Buy Co., Inc. (NYSE:BBY), The Kroger Company (KR), Casey's General Stores, Inc. (CASY), and PriceSmart, Inc. (PSMT), we think their stocks look undervalued at their current price levels. Therefore, these stocks could be solid bets to capitalize on the holiday-season sales growth.