5 Great Consumer Stocks To Buy For Cyber Monday
The way investors and media obsess about Black Friday is passé. It’s Cyber Monday that’s in vogue.
Yes! The Monday after the Thanksgiving weekend is predicted to be the largest online shopping day for U.S. consumers this year. Per the Adobe Digital Index 2015 Holiday Shopping Predictions, this year’s Cyber Monday online sales will grow 12% year over year, hitting a record $3 billion in a single day. Black Friday, on the other hand, is predicted to bring $ 2.7 billion in sales.
The National Retail Federation reports that 79% Americans plan to shop online on Cyber Monday. That implies demand from 183.8 million shoppers.
So popular is it that the online shopping tradition has extended to become a four-day – Friday through Monday – online shopping extravaganza.
Of course there are plenty of reasons behind the increase in Cyber Monday’s popularity. As Fortune puts it, “a feeling similar to “Black Friday fatigue” has yet to creep in for Cyber Monday.”
Cyber Monday also appears to accelerate purchases. It’s a known fact that the first step is the hardest; but once you start shopping, it is difficult to stop. According to Wyatt Investment Research, in 2014, an average shopper shelled out $468 on Cyber Monday compared to $309 on Black Friday.
What makes this Cyber Monday more attractive?
According to Adobe’s new holiday shopping forecasts, the majority of holiday shoppers will tune in to their mobile devices to browse retail sites this shopping season — accounting for approximately a third of online sales.
Online sales, as Adobe predicts, will go up 11% from the last holiday season, translating to a good $83 billion.
Another study by Forrester Research predicts that Americans will splurge a total of $95.5 billion online this holiday season. The research firm anticipates online sales to go up 11% in November and December. Though slightly slower than last year’s 12% rise, it is still about three times the growth of overall retail for the holidays.
Apart from this, a significant improvement in the labor market situation and lower fuel costs have raised disposable incomes.
The economy added 271,000 non-farm payroll jobs in October, crushing the consensus estimate of 182,000. Also, the unemployment rate declined to a seven-and-a-half-year low of 5% last month from 5.1% in September.
Moreover, the report showed that average hourly earnings increased 9 cents in October to $25.20 after rising only a penny in the prior month. The metric also registered a 2.5% year-on-year increase, recording its biggest gain since 2008.
Cyber Monday Stocks
Of course the overall holiday season seems to be great. But this time Cyber Monday will be the winner.
So which stocks to buy for Cyber Monday? We have identified 5 e-Commerce stocks based on favorable Zacks Ranks — Zacks Rank #1 (Strong Buy) or 2 (Buy) — and expected long-term earnings per share growth rate of 7% or more.
First up is obviously, Amazon.com (AMZN - Analyst Report), whichis looking to increase its revenues by as much as 25% this holiday quarter. The giant e-tailer will kick off the Cyber Monday sales on Nov 28 (Saturday), with hundreds of "Lightning Deals". Those sales will be available through Dec 5 on Amazon's dedicated website. The company will offer huge discounts on a wide array of products ranging from TVs, smartphones, cameras, projectors and toys to clothes. On Cyber Monday, Amazon will offer 10 "coveted" Deals of the Day.
This Zacks Rank #2 stock’s earnings per share estimates for 2015 moved up 5% to $1.81 over the past 30 days. The company delivered an average earnings beat of a massive 147.97% over the past four quarters, with a positive surprise in each. Also, its 35.6% long-term earnings growth rate accentuates its potential.
Amid all the media attention that Amazon is getting, there is another stock which, we strongly believe, will gain from the upcoming holiday season — eBay Inc. (EBAY - Analyst Report).
Carrying a Zacks Rank #2, eBay is one of the largest online retailers in the world. In the last reported quarter, the company beat the Zacks Consensus Estimate by 2 cents as the active buyer base rose 5% year over year to 159 million. Gross merchandise volume (GMV) rose 6%. Free cash flow was a healthy $462 million in the quarter. It raised the full-year EPS estimate to $1.80–$1.82 from $1.72–$1.77.
And this holiday season it’s quite evident that eBay wants to become more of an end-retailer than a search-driven source for second-hand goods. The two-decade-old company is rolling out a string of marketing programs and promotional deals to help shoppers and sellers alike.
The San Jose, CA-based company has already launched the Wish Bigger campaign, with a distinct "holiday hub" website for all seasonal shopping, and a "heatmap" that trails the most wanted items in different regions.
Ebay-wish-bigger.com, set to become live on Thanksgiving Day, will let shoppers vote to “break open and unlock a series of incredible deals.” The one that gets the maximum votes within an hour will be released to buyers in limited quantities.
On top of that, it will offer “deep discounts” on the most wanted items on eBay.com/deals, launching every hour around the clock from Thanksgiving Day through Cyber Monday.
The giant online retailer surpassed earnings estimates in all the four trailing quarters with an average beat of 8.85%. Also, the 7.1% long-term earnings growth rate underscores its growth potential.
Stamps.com(STMP - Snapshot Report) provides easy, convenient and cost-effective Internet-based services for mailing or shipping letters, packages or parcels anywhere in the United States at anytime. This Zacks Rank #1 stock delivered a robust third-quarter performance and raised the full-year outlook.
The company’s earnings estimates for 2015 have moved up 16% to $3.11 per share, over the past 30 days. The company delivered an average beat of 41.43% over the trailing four quarters, with a positive surprise in each. Also, its 20% long-term earnings growth rate highlights its potential.
Travelport Worldwide Limited(TVPT - Snapshot Report) is a travel commerce platform providing distribution, technology, payment and other solutions for the global travel and tourism industry.
The Zacks Rank #1 stock witnessed 13% upward movement in the earnings estimates for 2015 to 95 cents per share, over the past 30 days. Its 10% long-term earnings growth rate underlines its potential.
You may also add some sparkle to the portfolio this holiday season with Blue Nile Inc. (NILE - Snapshot Report), a leading online retailer of diamonds and fine jewelry.
The company’s earnings estimates for 2015 have move 2% upward to 91 cents per share, over the past 30 days. It delivered an average positive beat of 7.42% over the trailing four quarters. Also, its 17.83% long-term earnings growth rate underscores its potential.
It appears that it’s all about Cyber Monday this holiday season. Make sure you buy these stocks to make the most of this day.
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