Walmart is one of the 10 best retail stocks to buy now. The company has the perfect combination of physical and online channels that gives the company a strong edge over its competitors. The pandemic also helped the company increase its sales. In the first quarter, Walmart’s net sales jumped 10.5%. E-commerce sales increased by 74% in the period. In 2020, Walmart played a masterstroke to undercut Amazon’s Prime service with its premium subscription service called Walmart Plus. The service, which costs $12.95 a month, offers free and same-day deliveries.
As of the end of the third quarter, 69 hedge funds tracked by Insider Monkey reported owning Walmart shares, up from 60 funds a quarter earlier.
Also read: The “Anti-Amazon” Alliance – Amazon Has Finally Met Its Match
Home improvement equipment company Home Depot is one of the biggest beneficiaries of the coronavirus crisis, as consumers confined to home spend more time fixing and renovating their houses. In the third quarter, Home Depot’s sales jumped 23.2% and reached $33.54. Sales at stores increased by 24.1% in the period, crushing past the Wall Street’s estimate of 17% increase.
The retailer is investing heavily into its digital infrastructure and its efforts are paying off. In the third quarter, sales coming from online channels jumped about 80%, while 60% of online orders were fulfilled through a store.
A total of 73 hedge funds tracked by Insider Monkey held stakes in Home Depot entering the fourth quarter.
Here’s what Ensemble Capital Management had to say about HD stock in their Q4 2020 Investor Letter:
“A notable detractor from our performance came from our investment in Home Depot. Home Depot reported outstanding results during 2020, with the stock outperforming the S&P 500 for the full year. But after strong second and third quarter performance, the stock was down slightly in the fourth quarter, declining approximately 4%. We believe that home improvement spending will remain elevated in the years ahead as housing activity continues to rebound after years of lower than normal rates of Americans moving.”
3. Costco Wholesale Corporation (NASDAQ: COST)
Costco is one of the largest retailers in the world. The company ranks 14 on the Fortune 500 list. Costco sells grocery, prime beef, organic foods and essential items. It has close to 800 warehouses in the U.S. The company has a loyal customer base, and CEO Craig Jelinek believes that physical stores remain critical to the company in the long-term future. However, Costco is seeing a huge demand on its online channels.
In December 2020, RBC’s Scot Ciccareli said that 20201 will be a strong year for Costco, as the company has the strongest buying power in the retail space.
A total of 73 hedge funds tracked by Insider Monkey held stakes in Costco entering the fourth quarter, up from 61 funds a quarter earlier.
Shopify is one of the best stocks to ride the growth tide of the retail sectors. The company’s platform and technology is used by millions of small businesses. As businesses move online, the demand and user base of Shopify will continue to grow.
Shopify shares have gained about 135% over the last 12 months. Hedge funds are turning extremely bullish on Shopify. At the end of the third quarter, 81 hedge funds own stakes in Shopify, compared to 57 funds a quarter earlier. (Also read: Is Shopify (SHOP) A Good Stock To Buy Now?)
Amazon remains a giant in the retail and e-commerce space, upending the conventional shopping trends and retaining its position as the prime mover in the online shopping boom that is taking over the world. Over the last 12 months, Amazon shares have gained about 63%. The stock still has a big room for growth as the company continues its expansion outside the U.S. and in various sectors like pharmacy, drone delivery, digital payments and entertainment content.
In January, BofA increased its price target for AMZN to $4000 from $3,650 and maintained a Buy rating on the back of growth in Cloud, ecommerce and the company’s edge in the fulfillment segment of the ecommerce industry.
A total of 245 out of 816 hedge funds tracked by Insider Monkey held stakes in Amazon at the end of the third quarter.
Here is what L1 Capital International Fund said about AMZN in their Q3 2020 Investor Letter:
“Several investments in the technology sector were trimmed on valuation grounds with the proceeds used to increase our investment in Amazon. Amazon’s successful flywheel business model and Amazon Web Services are well known. However, we believe the current share price under‑appreciates:
– The consistency and longevity of Amazon’s growth potential in its key businesses;
– The importance of additional revenue streams such as advertising which are high margin and growing rapidly; and
– The strengthening barriers to competition and competitive advantages arising from Amazon’s stepped‑up investment in logistics and other infrastructure.”
Please also see 5 Best Cloud Computing Stocks To Buy and 15 Largest Ecommerce Companies In The World.
