Why the great success these last weeks in Retail Sector:
From an article in June 4, Investor's Business Daily:
"Eight of 17 retail subgroups, consumer electornics, apparel, diversified, discount chains, home furnishings, jewelry, building products and super/mini markets -- hold spots in the top quarter of the 197 industry groups tracked by Investor's Business Daily.
The reasons for the sector's strength? Near-perfect economic conditions and solid earnins growth are the biggest causes. then came renewed fears over Asia..
"Clearly we've seen a flight to domestic issues with all the worries around Asia," said....an analyst with BT Alex, Brown. That tends to benefit retailers, which normally have little foreign exposure.
Analysts stress that the sector is NOT a purely defensive play.
I think the momentum could carry over through the balance of this yar and possibly well in '99... The fundamentals are extremely good---strong same-store sales growth, a strong economy. It's an ideal environment for retail stocks.
As big buyers of Pacific Rim textiles, consumer electronics and other products, the chians benefit from overseas deflation and the strong dollar.
The article goes on to mention specific companies (ones I have been BULLISH on for 2 months now)
BKE,PSUN,COST, WMT, HD, KM,ZLC,ANF, BKE, and they end the article talking quite a bit about my old favorites: BKE, PSUN.. they say that 'now is a good time to look at stores aimed at teens'..
Well that's not news but it's good to see this reinforced in the paper. What I've been doing are scanning articles as well as ta/fa for the coming earnings season, which I feel will be a very profitable one for earnings plays and general plays. I'm prepared notes daily and have quite a nice group for the last week in June following through to July. There will definitely be Retail stocks in the group. SO if technology doesn't live up to its image of huge gains,fast growth, there will always be other sectors where traders/investors will be pouring in their money. |
