Retail stocks experience an upward move from now till the end of the year. I know this because I follow a seasonal 10-year chart.
It shows the past 10 years of performance for the SPDR S&P Retail ETF (XRT). That’s a retail fund that tracks more than 80 retail stocks.
You’ll find a variety of stores in its top holdings. Think GameStop Corp., Advance Auto Parts Inc. and Big Lots Inc.
Take a look at this chart below:
As you can see from the yellow box and arrow, this sector rallies from October 1 to December 31.
You’ll also notice there’s no change in direction from March to October. The ETF stays flat during those months.
So the breakout that begins in October is the seasonal trend you want to capitalize on. And I have three ways to do it…
3 Top Retail Stocks to Own
I call these seasonal patterns “prime seasons.”
Owning the top retail stocks in the sector during a prime season gives you an opportunity to outperform the stock market … by a lot.
Here are three of the top stocks this year:
- Rite Aid Corp. (NYSE: RAD): This retail pharmacy operator across the U.S. is our first top retail stock. The company announced earnings two weeks ago and exceeded analysts’ expectations. The best part is that RAD increased its guidance for the full year in 2020 — that means it’s outlined its future plans and financial expectations for the company. The positive outlook for next year is a major sign the company is on the right track. The positive earnings results and increased guidance give the stock momentum heading into the holiday season. With thousands of retail shops on corners throughout America, this is a top stock to capitalize on the rise in retail this holiday season.
- GameStop Corp. (NYSE: GME): The video game retailer is up next. The company is a brick-and-mortar retailer that specializes in video games. While the stock has struggled in recent years, its management is forging a new path for the company. GameStop will embrace competitive sports. It is going to create an “experience” for gamers within its existing stores. Insiders have been buying up shares on the news. This shows they are seeing the added value of the changes taking place within the company. With the retail holiday shopping season coming up, investors will see the benefits from these changes and push the stock higher.
- Signet Jewelers (NYSE: SIG): The massive jewelry store conglomerate is our last top stock. Signet owns brands such as Kay Jewelers, Jared and Zales. These are well-known brands that are largely located in malls across America, plus some stand-alone stores. U.S. tariffs on Chinese goods impact jewelry prices — the trade war weighs on the stock. Heading into this holiday shopping season, I expect to see some easing in U.S.-China trade talks to keep the consumer upbeat. The consumer can, and has been, carrying our economy. All indications are pointing for that growth to continue this year. And any progress on trade talks will only boost that confidence. Signet is set to benefit from both of those trends as we head into the prime season for the retail sector. Full story at BanyanHill.com
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