There has been talk of the economy recovering for the past few years, but it has been a slow growth with mixed numbers. Recently, economic data was released showing an increase in consumer spending at shopping malls and retail stores. The Commerce Department reported that a 1.1% increase for the month of February followed a 0.6% increase for January, and Bloomberg's Shobhana Chandra states that "sales rose in 11 of 13 categories, including auto dealers and clothing stores, showing gains in demand were broad based."
There is still some worry that the spending could be pinched by higher gas prices, but they are not currently playing a large factor. Credit Suisse economist Jonathan Basile said that consumers are "unfazed by higher gas prices ... This is a pleasant surprise on the overall picture for the economy. For the Fed, it's steady as she goes. They will be encouraged, but there is still a long way to go." Sales also increased 1.6% at auto dealers, making up for the prior month's drop.
Chandra also states, "worker pay jumped in the last six months of 2011 by the most in almost five years, helping households squirrel away some extra cash." Barclays Capital's chief U.S. economist, Dean Maki, projects purchases will increase by an annual 3% for the second half of the year, while the S&P Supercomposite Retailing Index is up approximately 15% year to date. Even with these positive numbers, though, Fed policy makers plan to keep interest rates low through late 2014, stating that stimulus is still warranted.
Business section: Investing ideas
We started this screen with a list of retail stocks that have seen positive returns year to date, and then checked the institutional transactions for purchases over the past quarter. Will these companies continue to see success?
List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)
1. Lululemon Athletica
2. Sears Holdings
4. Phillips-Van Heusen: Designs and markets branded dress shirts, neckwear, sportswear, footwear, and other related products worldwide. Market cap at $6.02B. The stock price has increased 26.26% year to date. Net institutional purchases in the current quarter at 6.5M shares, which represents about 10.02% of the company's float of 64.88M shares
5. Newell Rubbermaid: Designs, manufactures, sources, packages, and distributes consumer and commercial products. Market cap at $5.32B. The stock price has increased 14.80% year to date. Net institutional purchases in the current quarter at 10.0M shares, which represents about 3.48% of the company's float of 286.99M shares
6. Under Armour
7. Sally Beauty Holdings: Engages in the distribution and retail of professional beauty supplies. Market cap at $4.67B. The stock price has increased 18.69% year to date. Net institutional purchases in the current quarter at 25.3M shares, which represents about 18.35% of the company's float of 137.88M shares
8. DSW: Operates as a specialty branded footwear retailer in the U. Market cap at $2.43B. The stock price has increased 27.05% year to date. Net institutional purchases in the current quarter at 1.3M shares, which represents about 3.22% of the company's float of 40.32M shares
9. Steven Madden: Designs, sources, markets, and sells fashion-forward footwear for women, men, and children. Market cap at $1.94B. The stock price has increased 28.03% year to date. Net institutional purchases in the current quarter at 1.2M shares, which represents about 3.08% of the company's float of 39.01M shares
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Danny Guttridge does not own any of the shares mentioned above.
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