Retail
5 Retail Stocks Handily Outperforming Amazon So Far in 2019
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It’s been a tough ride to be a brick-and-mortar retailer in the past decade or so. Even with a rising stock market over 10 years and even with a strong economy, many retailers are under constant fire from the likes of Amazon.com Inc. (NASDAQ: AMZN) and other online-only retailers.
While the causes of the business pressure in traditional retailing are well known, some companies are managing to continue to do well. Other companies that had suffered have managed to recover and see big gains for their shareholders.
24/7 Wall St. has been tracking the continued gains and recovery in the market in 2019. While Amazon is up about 20% from a year ago and about 18% higher so far in 2019, and even with it previously targeting a $1 trillion valuations and being down about 14% from last year’s highs, some rather well-known retail companies are seeing far larger gains for their investors in the first quarter of 2019. And several others are within striking distance of Amazon’s performance in the first quarter of 2019.
Without question, there remain some rather large hurdles and risks that could trap would-be investors in retail. One significant risk that individual retailers have to be more careful about is in stocking the items that consumers want to buy at different times of the year and with seasonal offerings.
It is important to understand why the first-quarter share performance in any given year matters so much to the retail sector. This is the period when investors get to evaluate how a company did in the ever-important holiday season and what a company is forecasting for the year ahead.
Four well-known retail stocks are outperforming Amazon so far in 2019. We have conducted a screen from Finviz, added in some trading and fundamental color, and we have included what the implied upside could be using the consensus analyst target prices from Refinitiv.
Bed Bath & Beyond Inc. (NASDAQ: BBBY) just hasn’t been able to find a solid turnaround. Still, this year has seen a better showing in its numbers than had been seen, and now a group of activist investors is targeting the entire board of directors for replacement. Bed Bath & Beyond shares are still down 20% from a year ago, but it was last seen trading up a whopping 49% so far in 2019. With its shares recently trading around $17, the consensus analyst target of $13.00 may not sound enticing, as some analysts have not refreshed their targets after the activist investor news. Its market cap is only $2.3 billion at this time, and its 52-week trading range is $10.46 to $21.74. The shares peaked at $80 in late 2013.
J.C. Penney Co. Inc. (NYSE: JCP) was very surprising to see as the second top performer of the 20 retail stocks we used in our screen for the first quarter of 2019. While the stock is still down almost 50% from a year ago, the shares have gained a whopping 46% so far in 2019. This company remains in desperate need of a turnaround, and the $1.57 share price compares with a 52-week range of $0.920 to $3.54. The market cap is only about $500 million at this point, so don’t look for Jeff Bezos to be worried that the department store is going to wreck the Amazon empire. The consensus analyst price here is at $1.45. Shares recently reacted positively after the appointment of a new chief financial officer. Before thinking that only great days await at J.C. Penney, note that this was an $80 stock at the pre-recession peak.
Best Buy Co. Inc. (NYSE: BBY) is still plugging away and has overcome being called the “Amazon showroom” as some investors had worried in years past. While the shares are up just 5% from a year ago, the stock has given a return of 33% so far in the first quarter of 2019. Best Buy has a $19 billion market cap, based on its $70.30 share price, and a 52-week trading range of $47.72 to $84.37. The consensus target price was last seen at $76.64.
Abercrombie & Fitch Co. (NYSE: ANF) has recovered handily, with investors believing its turnaround story. That said, it is still targeting some store closures. Its shares were last seen up 26% so far in 2019, and that’s still up about 9% from this time in 2018. Trading at $26.00 a share, it has a market cap of just $1.7 billion. Abercrombie has a 52-week trading range of $15.28 to $29.69 and a consensus target price of $24.50. The share price is still only about one-third of its peak value from before the recession.
Target Corp. (NYSE: TGT) is the last of the major retailers we have seen outperforming so far in 2019. Its 20.5% gain this year compares with a 17% gain from this time last year. Target’s near $80 share price falls in a 52-week range of $60.15 to $90.39, and the consensus price target is $85.73. The market cap is $41 billion.
Other retail-focused stocks are also in the hunt of Amazon’s near 19% gain year to date.
The TJX Companies Inc. (NYSE: TJX) was last seen up 18.1% year to date, and Costco Wholesale Corp. (NASDAQ: COST) was up 17.3%. Shares of Lowe’s Companies Inc. (NYSE: LOW) are also continuing to recover some ground from Home Depot Inc. (NYSE: HD) with gains of almost 15%, versus 10% year-to-date gains from its rival. Dollar Tree Inc. (NASDAQ: DLTR) continues to see a recovery as well, with gains of almost 13% so far in 2019.
Some investors have feared the dominance of Amazon for years now. And a lot of that fear is justified. Amazon didn’t get on the path for a $1 trillion market cap out of the blue. Still, there is at least some proof that other retail stocks can perform well or stage recoveries in the current climate.
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