Welcome to another edition of Stock of the Week, a FREE eletter sent out each Tuesday containing my in-depth analysis on the stocks that matter to you most—with no mysteries and no strings attached. (View complete Stock of the Week archive here.)
Thanks to all of you who emailed me over Thanksgiving break with stock ideas. Last week, when I gave you my top telecom pick, I asked you to send me an email at email@example.com with suggestions of which sector to tackle next. You must have had Black Friday on the mind because retail stocks really dominated my inbox! Most of you were bearish on the sector and asked whether specific stocks should be sold, so this week I’ll give you a list of the 10 worst retail stocks to sell now.
But not all retail stocks are suffering. I’ll also give you my absolute favorite pick in this industry. This stock is truly a diamond in the rough and should deliver big profits this holiday season and beyond.
Remember, each week I cover stocks that you want to know about. So drop me a line at firstname.lastname@example.org, and let me know what stocks or industries you’re thinking about.
I’ve gotten a lot of messages lately about retail stocks, and it’s no surprise why. Consumer spending is on everyone’s mind, and it’s difficult to get a feel for how the holiday shopping season will play out. According to retail data analysis firm ShopperTrak, U.S. in-store retail sales on Black Friday grew 0.5% compared with last year. While any positive spending report is good news, sales on Black Friday 2008 increased 3% versus 2007, so this year’s half-percent rate of growth is comparatively slower. The bottom line is consumers are still being cautious—but we won’t be able to draw any fact-based conclusions until later in the season.
One thing is for sure: Not all retail stocks are affected by the current conditions in the same way. Certain luxury retailers or big-ticket vendors are really hurting, while discount chains or brands with strong customer loyalty continue to do well.
To keep you out of some of the worst stocks in the retail sector, here’s a list of the 10 worst retail stocks I want you to sell immediately: