Hilary Kramer has 30 years of experience on Wall Street; she was an analyst and investment banker at...
Five Retailers for Your Shopping List
03/11/2014 7:00 am EST
Our Weiss Ratings Model has been warming up to the retailing industry; I want to pass along some names in the space that I think are worth further consideration for your portfolios, suggests Don Lucek in Money and Markets.
Gap Inc. (GPS) is rated A- by our Weiss Ratings Model. The company has, so far, proven that it can remain ahead of the curve in terms of financial progress, even if its merchandising is constantly threatened by fickle fashion trends.
It's a well-run affair that beat the S&P 500 (SPX) and the S&P Retail (XRT) over the recent past. While I'd be careful about entry, I think GPS will remain a stock market winner into the longer term (at least one to three years).
TJX Corp. TJX, rated A-, has experienced some rough seas in the past, and should be able to manage through them with its core strategy of a low-overhead, high-margin business model well into the future.
Consumers can be fickle, but they remain committed to thematic shopping experiences, such as that represented by TJX.
Three other high-rated stocks that haven't kept pace with the industry, but remain as top picks in the ratings system, employ somewhat more specialized business models, as specialty retailers.
I think these stocks are worthy of consideration by more intrepid investors right now: Cabela's (CAB), rated A, a sporting-goods super store, Williams-Sonoma (WSM), rated A-, a high-end home-goods affair, and Tiffany (TIF), rated A-, the high-end jeweler.
Each of these firms faces the threat that consumers will pull back luxury spending, in principle. However, over the year, each has proven adept at keeping foot traffic (and thus, sales opportunities) high.
I think they're all worth considering if you are looking for high-quality retailer exposure. I think all of these stocks are buyable today.
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