Most investors are aware of the fact that retail based stocks have been dealt heavy losses lately. The recent lackluster performance can be attributed to various trends such as the growth of online shopping and increased competition. However, as most retail equity continues to plummet, there are a select number of stocks in the industry that are projected to greatly expand.
Luckily, we can utilize the Zacks Stock Screener to discover stocks in the retail industry that possess a bright future outlook. We can analyze growth through our growth style score category, projected sales, as well as earnings and EPS growth. Basically, Zacks customers can screen for investments that provide growth prospects within a struggling industry.
Check out these five retail growth stocks to buy now:
1. Aaron’s, Inc. AAN
Aaron’s is involved in the sales and leasing of residential and office furniture, electronics, home appliances and accessories. The company is currently on a hot streak, as they have defeated their earnings projections in each of the four past operational quarters by an average of 10.55%. Further, Aaron’s consumer electronics retail industry ranks in the top 1% of the Zacks Industry Rank. The firm has received “A” grades in Growth and Value, which means that Aaron’s is considered undervalued while currently exhibiting extensive growth prospects.
Aaron’s posted a Cash Flow per Share of $21.76 which towers over the industrial average of $0.75. This metric shows that Aaron’s is utilizing shareholder equity to finance their company much more effectively than their competitors. Additionally, Aaron’s reported a strong EV/EBITDA of 1.83 and RoE of 11.09, both of which beat their respective industrial averages of 3.70 and 3.79%. Finally, Aaron’s share price has increased by an incredible 82.03%, making now the perfect time to invest in the company that holds a Zacks Rank #1 (Strong Buy).
2. Big 5 Sporting Goods Corporation BGFV
Big 5 Sporting Goods is a leading sporting goods retailer in the western United States. The stock has surged by 56% in the last year, defeating the industry’s decline of 4.7%. Additionally, the company has beaten earnings estimates in four straight quarters while sales have also increased. Big 5 is attempting to expand as they plan to open eight new stores throughout 2017. At the beginning of April, the firm reported a robust balance sheet with cash of $5.9 million, total shareholders’ equity of $206.8 million and long-term debt of $21.8 million.
Big 5 Sporting Goods pays a strong 4.56% dividend and received “A” grades in each style score category including Value, Growth, and Momentum. Even though this company is projected to immensely expand, Big 5 received a phenomenal beta rating of 0.03, which means that the stock is considered less volatile than the average security. Also, the company posted a debt/capital ratio of 10.30%, which beats the industrial average of 13.51%. This metric shows that Big 5 is financing with less debt or liabilities than its competitors. Big 5 Sports Goods Corporation currently sports a Zacks Rank #1 (Strong Buy).
3. Burlington Stores, Inc. BURL
Burlington Stores operates as an off-price apparel and home product retailer. The company ought to be known as the poster child for consistency, as they have beaten their earnings projections in each of the past fourteen quarters dating back to 2014. Also, Burlington holds an “A” grade for Momentum and Growth, which means that the share price has greatly increased and that the company is expected to continue expanding.
Burlington Stores reported current cash flow growth of 19.96% which compares favorably to the industry average of 4.58%. In essence, the magnitude of Burlington’s positive cash flows is projected to increase in the near future. Further, Burlington possesses a projected EPS growth of 22.82% compared to their competitors’ average of 9.89%. This metric presents the notion that Burlington is utilizing shareholder equity to grow faster than its competitors. Burlington Stores was recently upgraded to a Zacks Rank #2 (Buy).
4. The Children’s Place, Inc. PLCE
The Children’s Place is a specialty retailer of apparel and accessories for children under the age of twelve and newborns. The company received “A” grades for Value and Growth, which means that we believe that the firm is undervalued and will continue to expand. Additionally, Children’s Place features a RoE of 19.35% and Net Margin of 6.25%, both of which compare favorably to the industrial averages of 9.56% and 2.79%, respectively.
As of 60 days ago, the company’s full-year EPS estimates increased by 9.50% to an impressive $7.26. Also, Children’s Place has beaten their earnings projections for a whopping twenty straight quarters by an average of 14.66% dating back to 2012. Basically, this company has been growing steadily and consistently unlike most of their competitors on the equity securities market. The Children’s Place sports a Zacks Rank #1 (Strong Buy).
5. Conn’s Inc. CONN
Conn’s Inc. is a retailer operating specific retail locations in Texas and Louisiana that sells major home appliances. Conn’s has absolutely demolished their earnings estimates over the past four operational quarters by an average of 80.87%. Furthermore, Conn’s scored an “A” grade for Growth, which means that we project the company to continue to develop and broaden. Conn’s participates in the consumer electronics retail industry, which is currently ranked in the top 1% of the Zacks Industry Rank.
Conn’s features a Cash/Price ratio of 41.50 and Price/Sales of 0.36, both of which beat their respective industry averages. Additionally, Conn’s share price has exploded recently, as it has increased by a remarkable 139.63%. Finally, Conn’s full-year EPS estimates have skyrocketed by 50% to $0.36. Now might be the perfect time to purchase shares of Conn’s as we project immense growth in the future. Conn’s Inc. holds a Zacks Rank #1 (Strong Buy).
Today’s Stocks from Zacks’ Hottest Strategies
It’s hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 – Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2%, respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 – Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we’re willing to share their latest stocks with you without cost or obligation. See Them Free>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.