Macy's (NYSE:M) is up 67% YTD. Yet, its shares remain a buy from a growth and value perspective. Macy's is benefitting from pent-up demand as people are eager to shop in stores. It's e-commerce division is also growing at a healthy clip.For the stock market, 2021 has been an inversion of 2020 in so many ways. Many of the biggest winners of last year have turned into some of the biggest underperformers this year. Just take a look at the work from home stocks, cannabis stocks, or the electric vehicle (EV) sector. Certainly, we can point to many factors such as the economy reopening, long-term interest rates moving higher, the rotation from growth to value, and the market’s general tendency to mean-revert especially when trends get extended.
Thus, it’s also not surprising that the laggards of last year are now outperforming this year. Some noteworthy examples include the energy sector as oil is now above the pre-coronavirus levels, travel and tourism stocks such as the airlines, hotels, and cruise operators, and retail stocks.
Within that group, retail stocks are particularly interesting. Among the retail sector, one of the strongest performers in 2021 has been Macy’s (M) with a 67% YTD gain. Despite this impressive gain, I believe the stock has more upside for the following four reasons: the economy’s reopening which is leading to increased foot traffic to stores and more spending on formal attire; the company’s booming e-commerce sales; strong consumer spending figures; and very attractive valuations.