The Retail Resurgence Is A Rare Opportunity

I’d look at the PowerShares Dynamic Retail ETF (NYSE: PMR).

Rare Retail Opportunity


Before Wall Street’s selling squall, the ETF was already on its way to hitting its old highs from 2015. I think it will do so again even if the broader market cools off because of the undervalued nature of many retailers.

The ETF has an intriguing mix of companies, with nearly 20% of the portfolio devoted to large-cap value stocks in the group, such as Best Buy Co. (NYSE: BBY), Walgreens Boots Alliance Inc. (Nasdaq: WBA) and others. About 40% of the portfolio is weighted in smaller companies that are growing faster than the sector as a whole.

The game is slowly changing for heavily indebted American consumers. Interest rates are heading higher, which means it’s that much more expensive to carry a credit card balance.

But for now, the old rules still apply. Consumers have more money in their pockets. And the share prices of many of the store chains they shop in are undervalued. A rare retail opportunity is presenting itself.

I think we’ll see the PowerShares ETF rise at least 20% to 30% in the next six months.

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