Top Retail Stocks To Buy For 2015


If you’re feeling good about the market, you’re not alone. Take my hand as we go over some of this week’s more uplifting headlines.

1. Home on the range
Lennar  (NYSE: LEN  ) picked a timely day to post better-than-expected quarterly results.

The homebuilder’s heartier-than-expected profitability came just as the lastest S&P/Case-Shiller data shows that prices for homes in 20 major metropolitan cities posted their largest year-over-year gain for the month of April since the sudsy real estate bubble days of 2006. The 2.5% sequential gain — from March to April — is actually the largest monthly increase on record.


Against this welcome backdrop, Lennar came through with another blowout financial report. Pre-tax earnings more than tripled, and the developer’s ultimate $0.61 a share in net income was almost twice as much as what Wall Street was expecting.

Lennar’s revenue of $1.43 billion was also comfortably ahead of the $1.32 billion that the pros were targeting. 

Top Retail Stocks To Buy For 2015: Ulta Salon Cosmetics and Fragrance Inc (ULTA)

Ulta Salon, Cosmetics & Fragrance, Inc. (Ulta), incorporated on January 9, 1990, is a beauty retailer, which provides one-stop shopping for prestige, mass and salon products and salon services in the United States. During the year ended January 28, 2012 (fiscal 2011), the Company opened 61 new stores. It operates full-service salons in all of its stores. Its Ulta store format includes an open and modern salon area with approximately eight to 10 stations. The entire salon area is approximately 950 square feet with a concierge desk, skin treatment room, semi-private shampoo and hair color processing areas. Each salon is a full-service salon offering hair cuts, hair coloring and permanent texture, with salons also providing facials and waxing.


The Company offers products in the categories, such as cosmetics, which includes products for the face, eyes, cheeks, lips and nails; haircare, which includes shampoos, conditioners, styling products, and hair accessories; salon styling tools, which includes hair dryers, curling irons and flat irons; skincare and bath and body, which includes products for the face, hands and body; fragrance for both men and women; private label, consisting of Ulta branded cosmetics, skincare, bath and body products and haircare, and other, including candles, home fragrance products and other miscellaneous health and beauty products. The Company has combined its three operating segments: retail stores, salon services and e-commerce, into one reportable segment.


The Company competes with Macy’s, Nordstrom, Sephora, Bath & Body Works, CVS/pharmacy, Walgreens, Target, Wal-Mart, Regis Corp., Sally Beauty and JCPenney salons.

Advisors’ Opinion:

  • [By Jonas Elmerraji]

     

     

    Nearest Resistance: $130

    Nearest Support: $100

    Catalyst: Q2 Earnings

     

    Shares of beauty supply operator Ulta Salon, Cosmetics & Fragrance (ULTA) moved up approximately 20% in Friday’s session, boosted by positive second quarter earnings numbers. Ulta reported profits for 94 cents per share for the quarter, beating out analysts’ best guess profits of 83 cents per share. Even better, the firm expects third quarter revenues on the high end of Wall Street’s expectations for both revenue and profits.


     

    The technicals look good in ULTA right now. This stock’s big gap higher on Friday broke shares above key round-number resistance at $100, clearing the way for a retest of last year’s highs up near $130. For traders who aren’t risk-averse, ULTA is buyable here.

     

    Read More: 5 Stocks With Big Insider Buying

     

  • [By Luke Jacobi]

    Shares of ULTA Salon, Cosmetics & Fragrance (NASDAQ: ULTA) got a boost, shooting up 17.9 percent to $114.89 after the company reported upbeat second-quarter results and raised its outlook. The company also unveiled a five-year plan for impressive growth.

  • [By Garrett Cook]

    Toward the end of trading Friday, the Dow traded down 0.60 percent to 16,947.43 while the NASDAQ declined 0.75 percent to 4,557.59. The S&P also fell, dropping 0.83 percent to 1,980.97.

    Leading and Lagging Sectors Cyclical consumer goods & services shares fell by just 0.50 percent in trading on Friday. Top gainers in the sector included ULTA Salon, Cosmetics & Fragrance NASDAQ: (ULTA), up 17.5 percent, and 1-800-Flowers.com (NASDAQ: FLWS), up 4.5 percent. In trading on Friday, utilities shares were relative laggards, down on the day by about 1.89 percent. Meanwhile, top decliners in the sector included Companhia Energética de Minas Gerais – CEMIG (NYSE: CIG), down 4.7 percent, and CPFL Energia SA (NYSE: CPL), off 4.3 percent. Top Headline Darden Restaurants (NYSE: DRI) reported better-than-expected fiscal first quarter earnings. The Orlando, Florida-based company reported a quarterly loss of $19.3 million, or $0.14 per share, versus a year-ago profit of $42.2 million, or $0.32 per share. Excluding non-recurring items, the company earned $0.32 per share. Its sales surged to $1.6 billion versus $1.53 billion. However, analysts were expecting earnings of $0.30 per share on revenue of $1.6 billion. Equities Trading UP Conversant (NASDAQ: CNVR) shares shot up 30.25 percent to $34.79 after Alliance Data Systems (NYSE: ADS) announced its plans to buy Conversant for $35 per share. Shares of ULTA Salon, Cosmetics & Fragrance (NASDAQ: ULTA) got a boost, shooting up 17.69 percent to $114.72 after the company reported upbeat second-quarter results and raised its outlook. The company also unveiled a five-year plan for impressive growth. Sportsman's Warehouse Holdings (NASDAQ: SPWH) shares were also up, gaining 15.89 percent to $7.00 after the company reported stronger-than-expected fiscal second-quarter results. Equities Trading DOWN Shares of Ruckus Wireless (NASDAQ: RKUS) were down 5.19 percent to $14.35. Buckingham

  • [By Garrett Cook]

    Cyclical consumer goods & services shares fell by just 0.30 percent in trading on Friday. Top gainers in the sector included ULTA Salon, Cosmetics & Fragrance NASDAQ: (ULTA), up 18.6 percent, and 1-800-Flowers.com (NASDAQ: FLWS), up 4.6 percent.

Top Retail Stocks To Buy For 2015: O’Reilly Automotive Inc.(ORLY)

O?Reilly Automotive, Inc., together with its subsidiaries, engages in the retail of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States. The company?s stores provide new and remanufactured automotive hard parts, including alternators, starters, fuel pumps, water pumps, brake system components, batteries, belts, hoses, chassis parts, and engine parts; maintenance items comprising oil, antifreeze, fluids, filters, wiper blades, lighting, engine additives, and appearance products; and accessories, such as floor mats, seat covers, and truck accessories. Its stores also offer auto body paint and related materials, automotive tools, and professional service provider service equipment. The company?s stores sell its brand name and private label products for domestic and imported automobiles, vans, and trucks to do-it-yourself customers and professional service providers. As of March 31, 2011, it operated 3,613 stores. The company was foun ded in 1957 and is headquartered in Springfield, Missouri.


Advisors’ Opinion:

  • [By kcpl]

    Reseller’s exchange retailer Autozone (AZO) has done well in 2014. Even though the stock has been exceptional than the S&P 500, its performance has been weaker than O’Reilly Automotive (ORLY) and Advance Auto Parts (AAP). Then again, Autozone is a steady performer and is the cheapest of the part from a valuation perspective, which is the reason investors should consider investigating it.

  • [By Ben Levisohn]

    Shares of AutoZone have fallen 1.7% to $531.87 at 11:52 a.m., while Advance Auto Part (AAP) has dropped 1.6% to $121.27 and O’Reilly Automotive (ORLY) has declined 0.9% to $147.25. Pep Boys (PBY), however, has bucked the selling–its shares have gained 1.9% to $10.57.

  • [By Peter Graham]

    The fiscal Q3 2014 earnings report for auto parts retailer stock AutoZone, Inc (NYSE: AZO), a peer of Advance Auto Parts, Inc (NYSE: AAP), O’Reilly Automotive Inc (NASDAQ: ORLY) and The Pep Boys – Manny, Moe & Jack (NYSE: PBY), is scheduled for before the market opens on Tuesday. Aside from the AutoZone earnings report, it should be said that Advance Auto Parts, Inc reported Q1 2014 earnings on May 15th (results were better than expected and they upped guidance); O’Reilly Automotive Inc reported Q1 2014 earnings on April 24th (results topped expectations); and The Pep Boys reported Q4 2013 earnings on April 15th and will report Q1 2014 earnings on June 10th (PBY reported a surprise loss as tire pricing negatively hit revenue). However and given the current uncertain economy that is keeping most consumers in their old cars, you would think that auto parts retailers in general would all be doing well.

  • [By James E. Brumley]

    O’Reilly Automotive Inc. (NASDAQ:ORLY), AutoZone, Inc. (NYSE:AZO), The Pep Boys – Manny, Moe & Jack (NYSE:PBY), and Advance Auto Parts, Inc. (NYSE:AAP) may all technically be in the same business, but they’re hardly in the same proverbial boat. In fact, their performances – sales and earnings – are oddly disparate. Which among PBY, AZO, ORLY, and AAP are the winners and the losers, and perhaps more important, why? The question can at least partially be answered by a chart, and what the chart can’t tell us about each, the narrative can.


    O’Reilly Automotive

Top Retail Stocks To Buy For 2015: AutoCanada Inc (ACQ)

AutoCanada Inc. (AutoCanada) is a multi-location automobile dealership groups. As of December 31, 2011, the Company operated 24 franchised dealerships in British Columbia, Alberta, Manitoba, Ontario, New Brunswick and Nova Scotia. During the year ended December 31, 2011, its dealerships sold approximately 28,000 vehicles and processed approximately 300,000 service and collision repair orders in its 333 service bays. As of December 31, 2011, it was authorized to sell through its dealerships the vehicle brands, which include Chrysler, Dodge, Jeep, Ram, Fiat, Hyundai, Nissan, Infiniti, Volkswagen, Mitsubishi and Subaru. In addition, it sells a range of used vehicles. In November 2011, the Company acquired assets of two dealerships. In January 2013, the Company purchased the assets of a Volkswagen dealership known as People’s Automotive Ltd. Advisors’ Opinion:

  • [By Greg Quinn]

    AutoCanada Inc. (ACQ), the country’s largest publicly traded chain of car dealerships, is using sales of trucks to Alberta oil workers to fund higher dividends and buy out competitors.

Top Retail Stocks To Buy For 2015: Macy’s Inc (M)

Macy’s, Inc., together with its subsidiaries, operates stores and Internet Websites in the United States. Its retail stores and Internet Web sites sell a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. The company also operates Bloomingdale’s Outlet stores that offer a range of apparel and accessories, including ready-to-wear, shoes, fashion accessories, jewelry, handbags, and intimate apparel products. As of January 28, 2012, it operated approximately 840 stores under the names of Macy’s and Bloomingdale’s; and 7 Bloomingdale’s Outlet stores, as well as macys.com and bloomingdales.com. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy’s, Inc. in June 2007. Macy’s, Inc. was founded in 1820 and is based in Cincinnati, Ohio.


Advisors’ Opinion:

  • [By MONEYMORNING.COM]

    What we’re seeing is a massive shift in the retailing landscape as more conventional stores such as Macy’s Inc. (NYSE: M), Target Corp. (NYSE: TGT), and Wal-Mart Stores Inc. (NYSE: WMT) have all missed on earnings in recent months.

  • [By Ben Levisohn]

    We are maintaining our Underperform rating on the shares and raising our one-year price target slightly to $3.00 (from $2.50), which considers further anticipated improvement in FY16 EBITDA (year ending 1/29/17) to $895mn, from our upward revised EBITDA estimate of $728.5mn (up from $699.6mn) for FY15 and applying an EBITDA valuation multiple of 6.5x, above Dillard’s (DDS) 6.1x and nearly comparable to Macy’s (M) 6.6x. JC Penney’s shares traded at an average EBITDA valuation multiple of 6.5x for the 10-year period ended 1/29/11 (prior to “Ron Johnson’s brief tenure”), the basis for our midrange valuation multiple. Our valuation multiple appears high; we think JC Penney shares should trade at a discount to Macy’s and Dillard’s because: 1) JC Penney is significantly more leveraged (5x in FY16 vs. 1.5x for Macy’s and 0.7x for Dillard’s); 2) its anticipated EBITDA margin is much lower (7.2% vs. nearly 14% and 12% for Macy’s and Dillard’s); and 3) it ow ns significantly less real estate (26% of its stores are owned in fee compared to 55% and 83% for Macy’s and Dillard’s respectively), which may partially explain its lower margin. Furthermore, our FY16 EBITDA estimate assumes JC Penney’s financial performance improves markedly, which may not transpire to the extent we estimate; thus, the significant optionality in the stock price, in our view.

Top Retail Stocks To Buy For 2015: DSW Inc (DSW)


DSW Inc. (DSW), incorporated on January 20, 1969, is a United States branded footwear and accessories specialty retailer operating 326 shoe stores in 40 states as of January 28, 2012, and dsw.com. DSW has two segments: the DSW segment, which includes the DSW stores and dsw.com sales channels, and the leased business division segment. As of January 28, 2012, it operated 326 DSW stores, dsw.com and leased departments in 261 Stein Mart stores, 74 Gordmans stores and one Frugal Fannie’s store. During the fiscal year ended January 28, 2012 (fiscal 2011), DSW opened 17DSW stores and closed two DSW stores. On May 26, 2011, Retail Ventures, Inc. (RVI) merged with and into DSW MS LLC (Merger Sub), with Merger Sub surviving the Merger and continuing as a wholly owned subsidiary of DSW. In March 2012, the Company announced the opening of its store on 34th Street in Manhattan. In September 2013, DSW Inc announced the opening of a new store in Eatontown, NJ. In October 2013, DSW Inc announced the opening of two new stores in New York City. In October 2013, DSW Inc announced the opening of a new store in Greenville, SC.


The Company offers an assortment of brand name and designer dress, casual and athletic footwear for women and men, as well as accessories through its DSW stores and dsw.com. It also offers kids’ shoes exclusively on dsw.com. The Company leases stores, distribution and fulfillment centers and office facilities under various arrangements with related and unrelated parties. DSW also operates leased departments for three retailers in its leased business division segment. As of January 28, 2012, DSW supplied merchandise to 261 Stein Mart stores, 74 Gordmans stores and one Frugal Fannie’s store. During fiscal 2011, DSW added 20 leased departments and ceased operations in 36 leased departments.


Advisors’ Opinion:

  • [By Ben Levisohn]

    DSW (DSW) had jumped 12% to $31.90 after the shoe retailer beat earnings forecasts and raised its guidance.

    Burger King Worldwide (BKW) has risen 3.2% to $33.45 after Warren Buffett said he would help finance its merger with Tim Hortons (THI). Tim Hortons has leaped 10% to $82.55.

  • [By Laura Brodbeck]

    Tuesday

    Earnings Expected: Bob Evans Farms (NASDAQ: BOBE), Analog Devices (NASDAQ: ADI), TiVo (NASDAQ: TIVO), Best Buy (NYSE: BBY), DSW (NYSE: DSW) Sanderson Farms (NASDAQ: SAFM) Economic Releases Expected: U.S. consumer confidence, U.S. house price index, U.S. Redbook, U.S. durable goods orders


    Wednesday

  • [By jaggom]

    The footwear advertise in the U.S. is really divided and there are players like (DSW) and Foot Locker (FL) in the same space.

    DSW has been on an expansion drive and is poised to include 30 stores in the U.s. this year. This expansion drive indicates that the organization’s designer shoes and accessories are fast picking up fame among target customers and urging it to develop its business. What’s more, its wedding shop accumulation sets it separated from peers. Presently, DSW operates 382 stores in 42 states, the District of Columbia and Puerto Rico.

Top Retail Stocks To Buy For 2015: LightInTheBox Holding Co Ltd (LITB)


Lightinthebox Holding Co., Ltd., incorporated on March 2008, is a global online retail company that delivers products directly to consumers globally. The Company offers a selection of lifestyle products through www.lightinthebox.com, www.miniinthebox.com and other Websites, which are available in 17 languages. It targets lifestyle product categories. It offers products in the three core categories of apparel, small accessories and gadgets and home and garden. As of December 31, 2012, the Company had more than 205,000 product listings. It primarily conducts its operations through its Hong Kong subsidiary, Light In The Box Limited and its Peoples Republic of China subsidiary, Lanting Jishi. In January 2014, the Company acquired Seattle-based social e-commerce company, Ador, Inc.


It operates its business from mainland China and Hong Kong but has delivered its products to consumers in over 200 countries and territories. During the year ended December 31, 2012, it derived 50.7% of its net revenues from Europe and North America, respectively. The Company offers customized products, such as wedding dress and evening dress, at scale for optimal marketing, merchandising and fulfillment. As of December 31, 2012, it offered its Website was available in English, French, Spanish, German, Italian, Portuguese, Russian, Dutch, Danish, Norwegian, Japanese, Swedish, Korean, Hebrew and Finnish.


The Company’s product offerings include apparel, small accessories and gadgets, home and garden, electronics and communication devices, and others. Apparel includes customized, special occasion apparel, such as wedding dresses, bridesmaid dresses, groom wear, cocktail dresses, formal evening wear, graduation dresses and accessories. It also includes fast fashion, namely women’s apparel that represents the latest fashion trends, under its Three Seasons / TS brand. Small accessories and gadgets category includes video game accessories, tablet co mputer and computer gadgets, electronics gadgets, electronic! s accessories such as electronic cables, headsets and chargers and home theater system accessories, car accessories, cell phone accessories, flashlights, lights, home and office gadgets, batteries, gifts and party supplies, toys and travel kits. Small accessories and gadgets are predominantly offered through its Website, www.miniinthebox.com.


Home and garden category includes faucets (including its own Sprinkle brand of faucets), lighting fixtures, paintings, portable home appliances, bathroom fixtures, door and window fixtures and certain types of furniture. Electronics and communication devices category includes tablet computers, car electronics, security systems, portable music and digital video disk (DVD) players, projectors, cell phones, short-wave radios, virtual display glasses and music player sunglasses. Other category includes beauty products, such as make-up supplies, wigs, footbaths, and ultrasonic cleaners. It also includes sports and outdoors produ cts.


Advisors’ Opinion:

  • [By Rick Munarriz]

    It was feast or famine for investors in Chinese Internet retailers this past week. Shares of online bookseller Dangdang (NYSE: DANG  ) soared 37% after posting strong quarterly results, but LightInTheBox (NYSE: LITB  ) went the other way after once again disappointing the market.

  • [By Jim Jubak]

    Paul Goodwin chose the Chinese company LightInTheBox Holdings (LITB) as his value play for this year. This company, based out of Bejing, actually sells most of its online merchandise to customers outside of mainland China.

Top Retail Stocks To Buy For 2015: Costco Wholesale Corporation(COST)


Costco Wholesale Corporation operates membership warehouses that offer a selection of branded and private label products in a range of merchandise categories in no-frills, self-service warehouse facilities. The company’s product categories include candy, snack foods, tobacco, alcoholic and non-alcoholic beverages, and cleaning and institutional supplies; appliances, electronics, health and beauty aids, hardware, office supplies, garden and patio, sporting goods, toys, seasonal items, and automotive supplies; dry and institutionally packaged foods; apparel, domestics, jewelry, house wares, media, home furnishings, cameras, and small appliances; meat, bakery, deli, and produce; and gas stations, pharmacy, food court, optical, one-hour photo, hearing aid, and travel. It also provides business and gold star (individual) membership services. As of April 26, 2011, the company operated 581 warehouses, including 425 in the United States and Puerto Rico, 80 in Canada, 22 in the Uni ted Kingdom, 7 in Korea, 6 in Taiwan, 8 in Japan, 1 in Australia, and 32 in Mexico. It also has Costco Online, an electronic commerce Web site, at costco.com in the United States and at costco.ca in Canada. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.

Advisors’ Opinion:

  • [By Asha Poddar]

    Indeed stockroom retailers, for example, Costco Wholesale (COST) has been in vogue in view of their slight edge technique, which empowers clients to get progressively lower costs.

  • [By David Goodloe]

    Kroger isn’t in a position to challenge Wal-Mart yet, although that is what it appears to be positioning itself for. Currently, it is muscling its way past other contenders like Costco (COST) and Target (TGT).

  • [By Peter Graham]

    The Q3 2014 earnings report for PriceSmart, Inc (NASDAQ: PSMT), a Latin America and the Caribbean membership shopping warehouse club like US based Costco Wholesale Corporation (NASDAQ: COST) and Sam’s Club which is owned by Wal-Mart Stores, Inc (NYSE: WMT), is scheduled for after the market closes on Thursday. Aside from the PriceSmart, Inc earnings report, it should be said that Costco Wholesale Corporation reported Q3 2014 earnings on May 29nd (revenues and profits rose but the latter still missed expectations) while Wal-Mart Stores, Inc reported Q1 2015 earnings on May 15th (results were a disappointment and the company blamed the weather along with taxes). However, it should be noted that there are rumors that Costco, with about 650 stores in the US and overseas, might be interested in buying PriceSmart given the latter’s footprint in Latin America and the Caribbean.

  • [By Ben Brody]

    The companies — Wal-Mart (WMT), Costco (COST), Walgreens (WAG), FreshDirect, CVS (CVS) and Drugstore.com — agreed to add unit prices to their product pages over the next nine months.