{"id":231972,"date":"2021-06-24T13:23:20","date_gmt":"2021-06-24T17:23:20","guid":{"rendered":"https:\/\/stockchase.com\/discover\/?p=231972"},"modified":"2021-06-24T13:23:20","modified_gmt":"2021-06-24T17:23:20","slug":"3-retail-stocks","status":"publish","type":"post","link":"https:\/\/stockchase.com\/discover\/3-retail-stocks\/","title":{"rendered":"3 Retail Stocks to Buy Now: Ready, Set, Shop"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Discover What&#039;s Inside<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/stockchase.com\/discover\/3-retail-stocks\/#Retail_Stocks\" >Retail Stocks<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/stockchase.com\/discover\/3-retail-stocks\/#TJX_Companies_TJX-N\" >TJX Companies (TJX-N)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/stockchase.com\/discover\/3-retail-stocks\/#Aritzia_Inc_ATZ-T\" >Aritzia Inc. (ATZ-T)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/stockchase.com\/discover\/3-retail-stocks\/#SPDR_Cons_Discretionary_ETF_XLY-N\" >SPDR Cons Discretionary ETF (XLY-N)<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Retail_Stocks\"><\/span>Retail Stocks<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As we emerge from our long lockdowns, Canadians will spend, spend, spend and retail stocks risk to profit. With 75% of the country receiving at least one Covid vaccination, including 25% of the nation being fully immunization, Canada is finally reopening. In 2020, <a href=\"https:\/\/www.cbc.ca\/news\/business\/bakx-record-savings-pandemic-spend-1.6071493\" target=\"_blank\" rel=\"noopener\">Canadians<\/a> squirreled away $212 billion in savings, compared to $18 billion in 2019. That works out to $5,574 per wallet vs. $479 or an astonishing 12 times more year over year. That means the savings rate leapt from 1.3% of disposable income in 2019 to 14.9% in 2020. If you were fortunate to maintain a constant stream of income, then you&#8217;ve paid down your credit card debts and boosted your credit scores. So, where will Canadians spend and what stocks should investors buy to capitalize?<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-232136\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2021\/06\/TJX-N-1-760x254.png\" alt=\"TJX-N stock chart\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"TJX_Companies_TJX-N\"><\/span><a href=\"https:\/\/stockchase.com\/company\/view\/1239\/TJX-N\">TJX Companies (TJX-N)<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"TJX-N stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/TJX-N\/chart?labels=tru\" width=\"125\" align=\"right\" \/> Good luck walking past any Winners or Marshalls store these days. In Toronto, 30-minute lines snake outside these shops, which offer markdowns on clothes and household goods. While essential retailers, <a href=\"https:\/\/stockchase.com\/company\/view\/379\/DOL-T\">Dollarama<\/a> in Canada and <a href=\"https:\/\/stockchase.com\/company\/view\/3661\/DG-N\">Dollar General<\/a> in the States, remained open during the pandemic, discount retailers under <a href=\"https:\/\/stockchase.com\/company\/view\/1239\/TJX-N\">TJX<\/a> endured long closures, such as mid-November to just recently in Ontario. While this will impact TJX earnings for the first half of 2021, the top and bottom lines should explode going forward.<\/p>\n<p>Okay, I hear you say, provincial law dictates that shops operate at only 15% capacity, which is a fair point, but the U.S. is nearing 50% full (two-shot) vaccination, and Canada is pushing hard to leap from its 25% rate. Taking the U.S. as a harbinger, then Winners will allow more customers in the coming weeks.<\/p>\n<p>I predict demand to remain steady over the summer from customers who have saved money, but also from those struggling to make ends meet. The latter need to buy a cheap, but quality pair of shoes as well underwear, socks, face cloths and bath towels. These are necessities that Dollarama doesn&#8217;t sell and are tricky to buy online without first touching or wearing first.<\/p>\n<p>TJX reported a Q1 beat in its top and bottom lines with earnings coming it at 44 cents per share vs. the expected 31 cents. Meanwhile, earnings and revenues rose year-over-year. True, many shops were closed in Q1 2020 from the pandemic, but open-only comp store sales jumped 16% YOY, including 9% for Canadian locations. With even more stores opening worldwide in Q2 and quarters to come, these numbers will only climb.<\/p>\n<p>Analysts on both sides of the border call TJX a strong buy at nine buy signals and one hold with an average price target of $80.50 or 27% upside. Also, a month ago, TJX reinstated its share buyback program.<\/p>\n<p>Reopening retail stocks have slid lately, so this a buying opportunity. TJX hit $73.78 on May 7 and now trades below $65. One caveat, though, is that TJX&#8217;s PE now stands at 52.7x, higher than the sector&#8217;s 32.5x. Attribute their PE to high growth expectations, but analysts foresee a forward PE of 22.94x. To be prudent, buy an initial position on a pullback, then see how TJX performs before buying a second tranche.<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-232138\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2021\/06\/Aritzia-2-1-760x254.png\" alt=\"Aritzia 2\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Aritzia_Inc_ATZ-T\"><\/span><a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritzia Inc. (ATZ-T)<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"ATZ-T stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/ATZ-T\/chart?labels=tru\" width=\"125\" align=\"right\" \/>(Past pick from Feb. 2, 2021, up 29%)<br \/>\nCompeting for the longest sidewalk lines is this celebrated Canadian chain of women&#8217;s boutiques. <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritzia<\/a> is driven by a robust social media presence, rising e-commerce sales and loyal consumers. On February 2 before the Canadian openings and just as American states were reopening, I recommended buying this on dips. Since then, ATZ-T has soared almost 29%.<\/p>\n<p>Most of this action has happened in the past month after the company closed its secondary offering of subordinate voting shares and just last week bought Reigning Champ, a leader in premium athletic wear. It&#8217;s a canny expansion into men&#8217;s clothing that the street likes. Shares jumped 2.5% the morning after this announcement. The Scotiabank analyst expects Reigning Champ to add to Aritzia $25 million in revenue and $5 million in adjusted EBITDA this calendar year.<\/p>\n<p>If so, the deal will extend Aritzia&#8217;s stellar performance, which handily beat the street in its last four quarters. Its EPS of 16 cents outpaces the sector&#8217;s 13 cents, while its profit margin of 2.24% outshines its peers of 1.88%. The PE stands at 220.5x, which appears sky-high until you consider the sector&#8217;s 211.2x. That said, the street foresees a forward PE of only 36.48x.<\/p>\n<p>While reopening stocks have been challenged this month, Aritzia is trending the other way: up. The problem is, it&#8217;s jumped so much lately that you need to wait for even a modest pullback before adding shares or entering. ATZ enjoys seven buys and a $38.14 price target or only 8.3% upside. Aritzia is a solid retail stock in a notoriously tough business and is run by sharp minds. This is a winner.<\/p>\n<p lang=\"en-CA\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-232137\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2021\/06\/XLY-N-1-760x254.png\" alt=\"XLY-N stock chart\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"SPDR_Cons_Discretionary_ETF_XLY-N\"><\/span><a href=\"https:\/\/stockchase.com\/company\/view\/2504\/XLY-N\">SPDR Cons Discretionary ETF (XLY-N)<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"XLY-N stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/XLY-N\/chart?labels=tru\" width=\"125\" align=\"right\" \/> If you want to buy a basket of reliable American consumer discretionary stocks, there&#8217;s <a href=\"https:\/\/stockchase.com\/company\/view\/2504\/XLY-N\">XLY<\/a> trading on the Nasdaq. While I prefer picking individual stocks, XLY is intriguing because its two largest holdings are actually tech names: <a href=\"https:\/\/stockchase.com\/company\/view\/67\/AMZN-Q\">Amazon<\/a> and <a href=\"https:\/\/stockchase.com\/company\/view\/4017\/TSLA-Q\">Tesla<\/a> which together comprise 36% of this ETF. Amazon will remain the king of e-retailing, while Tesla is volatile but leads the EV sector. So, you get some growth in this ETF.<\/p>\n<p>Other major retail stock holdings in XLY are the <a href=\"https:\/\/stockchase.com\/company\/view\/567\/HD-N\">Home Depot<\/a> and <a href=\"https:\/\/stockchase.com\/company\/view\/737\/LOW-N\">Lowe<\/a>&#8216;s (home improvement has soared during Covid), <a href=\"https:\/\/stockchase.com\/company\/view\/761\/MCD-N\">McDonald<\/a>&#8216;s, <a href=\"https:\/\/stockchase.com\/company\/view\/1088\/SBUX-Q\">Starbucks<\/a> and <a href=\"https:\/\/stockchase.com\/company\/view\/868\/NKE-N\">Nike<\/a> (strong global brands) and <a href=\"https:\/\/stockchase.com\/company\/view\/1239\/TJX-N\">TJX<\/a>. XLY&#8217;s MER is only 0.12%, though it pays a modest 0.67% dividend yield. Currently trading around $173, XLY is $7 off its recent highs. With summer spending expected to remain robust, XLY will likely return to those highs, but it&#8217;s probably worth waiting for at least a 5% pullback before entering, as market volatility driven by uncertain interest rates will likely endure in coming weeks.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Retail Stocks As we emerge from our long lockdowns, Canadians will spend, spend, spend and retail stocks risk to profit. With 75% of the country receiving at least one Covid vaccination, including 25% of the nation being fully immunization, Canada [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":232135,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cwp_meta_box_check":"No","cwp_rev_product_name":"","cwp_rev_product_image":"","wppr_links":[],"cwp_rev_price":"","wppr_options":[],"wppr_pros":[],"wppr_cons":[],"footnotes":""},"categories":[17],"tags":[],"class_list":["post-231972","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lists"],"wppr_data":{"cwp_meta_box_check":"No"},"_links":{"self":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/231972","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/comments?post=231972"}],"version-history":[{"count":0,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/231972\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media\/232135"}],"wp:attachment":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media?parent=231972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/categories?post=231972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/tags?post=231972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}