Cabela's, Home Depot and Other Retail Stocks Worth a Look Now

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The holiday shopping season seems to have gotten off to a strong start, particularly for Amazon.com
AMZN
and Walmart
WMT
, but also for Abercrombie & Fitch
ANF
and the Gap
GPS
. So here are seven retail stocks that might be worth a look. All have double-digit returns on equity and double-digit long-range EPS growth forecasts. Each is up more than 60 percent over the past year as well.
Cabela'sCAB
: This operator of about 40 sporting goods superstores was just named in Forbes as a "best idea" for 2013. It has a $3.2 billion market cap and its long-term earnings per share (EPS) growth forecast is more than 15 percent. The price-to-earnings (P/E) ratio is less than the industry average. Seven of 12 analysts polled by Thomson/First Call recommend buying shares. The share price is more than 83 percent higher year to date despite a pullback following the third-quarter report. The stock has outperformed Dick's Sporting Goods
DKS
over the past six months.
Chico's FASCHS
: Last week, this apparel retailer posted record EPS and double-digit revenue growth for its third quarter. Headquartered in Fort Myers, Florida, the company has a nearly $3 billion market cap, a long-term EPS growth forecast of more than 16 percent and a return on equity of about 16 percent. The P/E and PEG ratios are a little less than the industry averages. Its shares have pulled back from a multiyear high reached earlier this month. The stock has outperformed larger competitor Macy's
M
and the broader markets over the past six months.
eBayEBAY
: As with competitors Amazon.com and Overstock.com
OSTK
, shares of eBay have risen in anticipation of Cyber Monday. Call buyers seem to expect a New Year rally. The San Jose-based online auction company has a market cap of about $65.5 billion. Its return on equity is more than 21 percent and the long-term EPS growth forecast is about 16 percent. The operating margin is higher than the industry average. The share price is about 62 percent higher year to date. The stock has outperformed Amazon.com and the broader markets over the past six months.
Home DepotHD
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: The big-box home improvement chain reached a multiyear high on Black Friday as the housing market slowly recovers. The Atlanta-based company has a market cap near $96.3 billion, a dividend yield near 1.8 percent and a long-term EPS growth forecast of more than 15 percent. The return on equity is about 24 percent. The share price is up about 53 percent year to date, including more than seven percent higher in the past month. The stock has outperformed rival Lowe's Companies
LOW
and the broader markets over the past six months.
Lithia MotorsLAD
: The forecast for the current quarter calls for double-digit year-over-year percentage growth in EPS and revenue. This Oregon-based automotive retailer has a dividend yield near 1.2%. Its market cap is about $860 million, the long-term EPS growth forecast is more than 15 percent and the return on equity is more than 18 percent. The share price is about 75 percent higher than a year ago despite pulling back from a recent multiyear high. Over the past six months, the stock has outperformed larger competitors AutoNation
AN
and CarMax
KMX
.
Lumber LiquidatorsLL
: This retailer of hardwood flooring and accessories also has benefited from the housing recovery, and the CEO recently bought 2,500 shares. This nearly $1.5 billion market cap company has a long-term EPS growth forecast of about 17 percent and a return on equity of more than 19 percent. But short interest is about 23 percent of the float. The share price is up more than 200 percent year to date despite pulling back from a recent multiyear high. The stock has easily outperformed Home Depot and Lowe's over the past six months.
Vitamin ShoppeVSI
: This New Jersey-based specialty retailer and direct marketer has seen double-digit year-over-year percentage revenue growth for the past five quarters. The company has a market cap of $1.7 billion and a long-term EPS growth forecast of more than 19 percent. Its return on equity is more than 15 percent and the operating margin is higher than the industry average. The share price is up about 45 percent year to date. Over that time, the stock has outperformed competitor GNC
GNC
and the broader markets.
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Posted In: Long IdeasShort IdeasTrading Ideasabercrombie & fitchAmazon.comAutoNationBlack Fridaycabela'sCarmaxChico's FASConsumer DiscretionaryCyber MondayDepartment Storesdick's sporting goodsEBAYGAPGNChome depotHome Improvement RetailLithia MotorsLowe'slumber liquidatorsmacy'svitamin shoppeWalmart
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