Wall Street Picks Retailers That Were Winners and Losers During Holidays

By Douglas A. McIntyre Updated Jan 6, 6:50AM EST · Published Jan 4, 9:03AM EST

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Investors in retailer stocks already know two things about holiday results. The first is that, over the past month of 2013, the rising tide of the stock market helped lift all ships. The other is that virtually none of the large retailers have released December sales results. Neither has kept Wall Street from passing its own judgments.

The largest surprise among the publicly traded retailers was Target Corp. (NYSE: TGT). Despite a massive data breach that exposed millions of customer accounts, Target’s shares are flat from a month ago. While that does not match the 3% improvement in the S&P over the same period, it does better than its major competitor, Wal-Mart Stores Inc. (NYSE: WMT), whose shares dropped over 3%. Investors must suspect that the poor results Walmart has posted the last two quarters, both in terms of revenue growth, and same store sales, would not be reversed in December.

America’s two most troubled large retailers remained in trouble, if investor sentiment was accurate. Shares of both J.C. Penney Co. Inc. (NYSE: JCP) and Sears Holdings Corp. (NASDAQ: SHLD), which owns Sears and Kmart, dropped an identical 10%. Apparently neither was able to convince Wall Street that it could overcome ancient stores, poor merchandise selection, and negative consumer attitudes which have already kept people out of their stores for over two years. The drop in their stocks will fuel the impression that neither can survive, at least in its present form. J.C. Penney remains a candidate for Chapter 11. Sears has already begun to sell itself off in pieces.

If the market has had a darling in the retail sector this year, it is Best Buy Co. Inc. (NYSE: BBY). Its shares have risen 225% in the last 52 weeks of trading. However, Wall Street turned against the company in December, pressing its shares down by 5%. Best Buy’s CEO made the case that he had unlocked the secret to keeping customers to fleeing to Amazon, as they have for years. Investors must have rejected that as unlikely as the holiday season advanced toward its close. And, finally, the proxy for the success or failure of e-commerce was Amazon.com Inc. (NASDAQ: AMZN), which continues to take market share from bricks-and-mortar stores and their websites. Its share rose 3% in December, barely better than the S&P. While Amazon may have done well with sales, perhaps the concern remains that it discounts products like its Kindle too much, and gives away too much in terms of free shipping.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.