In this article, we discuss the 5 shopping stocks to buy in the holiday season. If you want to read our detailed analysis of these stocks, go directly to the 10 Shopping Stocks to Buy in Holiday Season.
5. Macy’s, Inc. (NYSE:M)
Number of Hedge Fund Holders: 35
Macy’s, Inc. (NYSE:M) operates as a retail organization that owns and runs stores, websites, and mobile applications. It runs over 720 retail stores across the United States and also has a presence outside the US in countries like the UAE and Kuwait. There are reports that the firm is planning to split the ecommerce business from the rest of the firm, although analysts have cautioned that such a move does not make sense as ecommerce brings in a large chunk of revenue for the overall organization.
Cowen analyst Oliver Chen recently raised the price target on Macy’s, Inc. (NYSE:M) stock to $32 from $27 and maintained an Outperform rating, noting that the ecommerce spinoff “does not appear likely” in the near term.
Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Yacktman Asset Management is a leading shareholder in Macy’s, Inc. (NYSE:M) with 8.2 million shares worth more than $157 million.
4. Kohl’s Corporation (NYSE:KSS)
Number of Hedge Fund Holders: 40
Kohl’s Corporation (NYSE:KSS) is a retail company based in Wisconsin. Baird analyst Mark Altschwager recently raised the price target on the stock to $70 from $68 and kept an Outperform rating, underlining the firm had made positive changes to the operating model and was “underappreciated” by investors. However, there are reports that the firm could suffer from supply chain issues as holiday spending ramps up.
Kohl’s Corporation (NYSE:KSS) has beat market expectations on earnings per share and revenue in three consecutive quarters, even as retail giant Amazon plans physical stores and disrupts the retail industry.
At the end of the second quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in Kohl’s Corporation (NYSE:KSS), up from 35 in the previous quarter worth $1.4 billion.
3. The Gap, Inc. (NYSE:GPS)
Number of Hedge Fund Holders: 43
The Gap, Inc. (NYSE:GPS) owns and runs one of the most recognizable apparel retail firms in the world. The stores operated by the firm market apparel for men, women, and children. The firm runs more than 3,100 stores globally, 615 of which are franchise stores. The stock has soared in the past few days after releasing a hoodie in collaboration with Yeezy, the fashion brand owned by famous rapper Kanye West. The stock also stands to benefit from an early start to holiday shopping amid supply chain challenges.
In early October, The Gap, Inc. (NYSE:GPS) announced that it had purchased Context-Based 4 Casting, a startup that uses artificial intelligence tools to transform retail operations. The purchase is part of a plan by the firm to increase investments in technology as it seeks to keep pace with ecommerce competition.
At the end of the second quarter of 2021, 43 hedge funds in the database of Insider Monkey held stakes worth $910 million in The Gap, Inc. (NYSE:GPS), up from 42 in the preceding quarter worth $988 million.
2. American Eagle Outfitters, Inc. (NYSE:AEO)
Number of Hedge Fund Holders: 41
As supply chain concerns overshadow the market, American Eagle Outfitters, Inc. (NYSE:AEO) recently announced that it had purchased Quiet Logistics for $350 million. The latter is a supply chain company that uses technology and robotics to deliver market fulfillment services. According to the management of the firm, the deal is just one part of a plan to overhaul the supply chain strategy of the company.
American Eagle Outfitters, Inc. (NYSE:AEO) has an impressive dividend history and recently declared a quarterly dividend of $0.18 per share, in line with previous. The forward yield was 2.68%. It also beat market estimates on earnings in the second quarter.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Select Equity Group is a leading shareholder in American Eagle Outfitters, Inc. (NYSE:AEO) with 17 million shares worth more than $666 million.
1. Abercrombie & Fitch Co. (NYSE:ANF)
Number of Hedge Fund Holders: 32
Abercrombie & Fitch Co. (NYSE:ANF) is an Ohio-based specialty retailer. Jefferies analyst Janine Stichter has a Buy rating on the shares with a price target of $57. In an investor note, the analyst highlighted how the company was taking advantage of a post-pandemic economic boom to invest in key growth opportunities. Stichter also backed the firm to increase digital gains in the coming months.
The predictions of the analyst seem to be coming true. Abercrombie & Fitch Co. (NYSE:ANF) recently announced that it would be offering same-day delivery to all customers who ordered from the company’s stores. The retailer has a partnership with Uber and other brands for the purpose.
At the end of the second quarter of 2021, 32 hedge funds in the database of Insider Monkey held stakes worth $564 million in Abercrombie & Fitch Co. (NYSE:ANF), up from 20 in the previous quarter worth $412 million.
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