Buy 4 Retail Funds As A Warm Up To The Black Friday Spree

Last Friday, the markets buoyed up on earnings results from certain retail primes. The Consumer Discretionary Select Sector SPDR ETF (XLY) jumped 1.2% and was the biggest gainer among the S&P 500 components. Apart from positive results, the retail sector also has the upcoming holiday season to draw investor focus.

The positives should boost retailers, translating into gains for the sector’s mutual funds as well. So, picking favourably ranked retail mutual funds will be prudent as these promise investors rich rewards this holiday season.

Earnings Numbers

Including releases before the opening bell on Nov 18, 33 of the 43 retailers in the S&P 500 index have reported results. Total earnings for these retailers gained 4.4% year on year on 5.2% higher revenues. Of these companies, 57.6% beat EPS estimates and 42.4% surpassed on revenues. However, there were some robust results that came in afterward, which gave a boost to the growth numbers.

Last Friday, Abercrombie & Fitch Co.’s (ANF - Analyst Report) stock soared 25% after reporting quarterly adjusted earnings of 48 cents per share, significantly ahead of the Zacks Consensus Estimate of 19 cents. Moreover, earnings increased 14.3% year over year.

Ross Stores Inc. (ROST) also reported better-than-anticipated top and bottom lines for the third quarter of fiscal 2015 and retained its outlook for the fourth quarter. Its shares jumped 10%.

Foot Locker, Inc.’s (FL) shares gained 5.7% after its adjusted earnings of $1.00 per share came ahead of the Zacks Consensus Estimate of 94 cents, and jumped 20% year over year. Separately, NIKE, Inc. (NKE - Analyst Report) added 5.5% following its announcement of a new share repurchase program worth $12 billion, along with a hike in its dividend and a two-for-one stock split. Nike jumped to a 52-week high. Also, its weekly gain of 8.9% was the best since the week ended Sep 26, 2014.

In fact, the positive results were not a one-day event as it followed great earnings news from behemoths like Amazon.com (AMZN - Analyst Report), Home Depot (HD), McDonald's (MCD - Analyst Report), BJ's Restaurants (BJRI - Analyst Report) and eBay Inc. ( (EBAY - Analyst Report).

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