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Upgraded Retail Stocks To Watch This Holiday Season

Wednesday, October 18, 2017

Mandeep Rai

When Citi upgraded the retail sector over the weekend, it caught my attention because my family and I saw firsthand the marked drop in mall traffic over the weekend. The mall, yes, that massive brick and mortar collection of stores under one roof that had been a shopping haven for consumers.

Does that mean online retailing is going to replace the mall completely? My wife, who is an expert at online shopping, finding deals and hitting the “place order” or “submit button” on the website of her choice, seems to think so.

Me? I am not entirely convinced.

We have a vacation coming up in a few weeks, and with kids that are growing like weeds out of their clothes, and ruining their shoes playing football in the muddiest corners of their school playground, it’s a hard sell to rely on an iterative process of purchasing, waiting, trying on, returning or replacing, then waiting again that accompanies e-commerce.

In our trip to the mall however, we found the answer to many of our problems, in one single trip. Even if we didn’t find exactly what we were looking for, our boys tried on a like item and the retailer could send the item they “had to have” from another store or warehouse directly to our door – a much better option with uncertainty taken out.

So what does it boil down to for investors? After the trip and Citi’s upgrade on Monday morning, I wanted to see if, during the Amazon-ification (e-commerce retail prominence) imposed slump to retail stocks, there were opportunities for savvy, longer term investors, ahead of that coveted 4th quarter Christmas shopping season.

If there were beaten down names out there, that are starting to show signs of life, and catching upgrades from our Weiss Ratings Model, I wanted to know:

Here is a list of liquid retail stocks in the underperforming consumer discretionary retail sector that are have been upgraded over the last month, along with their short and longer term performance, to help spot turn arounds or dip buying opportunities.

Note, not all of these companies are “Buy” rated, meaning they could be riskier. However, there could be further upgrades if performance at both the company and share price level continues. But with some of them beaten down so much and showing signs of life ahead of the holiday season and getting analyst attention, it might not be too soon to take a look – especially if you are looking to add more alpha to your portfolio.

Best,

Mandeep


Mandeep Rai, Senior Analyst

Small Cap Edition, By Mandeep Rai, Senior Analyst

Mandeep Rai has more than 15 years of investing experience, working as both a stock and credit analyst. At Weiss Ratings, he researches and evaluates financial and economic themes, and makes decisions on when to buy or sell specific shares for the Top Stocks Under $10 portfolio.

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