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Analysis

3 retail stocks to watch in 2021

2020 was a rough year for the retail industry, with sales declining at numerous traditional appliance stores, restaurants, bars, etc. The pressure to increase online presence leads to more capital deployment into technology, in turn, weighing on overall revenues. By December, however, things were getting brighter with US retail sales increasing about 3% year-over-year. And […]

February 19, 2021 3 min read

2020 was a rough year for the retail industry, with sales declining at numerous traditional appliance stores, restaurants, bars, etc. The pressure to increase online presence leads to more capital deployment into technology, in turn, weighing on overall revenues. By December, however, things were getting brighter with US retail sales increasing about 3% year-over-year. And […]

· February 19, 2021

2020 was a rough year for the retail industry, with sales declining at numerous traditional appliance stores, restaurants, bars, etc. The pressure to increase online presence leads to more capital deployment into technology, in turn, weighing on overall revenues.

By December, however, things were getting brighter with US retail sales increasing about 3% year-over-year. And we take a look at three retail stocks that could be part of your portfolio as the retail segment rises from its discounted price levels.   

Big Lots Inc.

Big Lots Inc. (NASDAQ: BIG) reported net sales for the third quarter of $1.378 billion, at a record growth of 18%. Net income declined 76.4% year-on-year, while earnings were supported by a one-time after-tax benefit of $136.6 million.

The Columbus-based discount retailer has projected further growth in its revenue, as a greater number of customers are showing interest in stay-at-home products and furniture. The in-person visits in 1400 stores and the online platform has given boost to the company’s revenue.

Online shopping increased over 50%. Big Lots stock has declined around 10% in previous trading sessions, but analysts predict a good momentum in the long run considering the stock’s fundamentals.

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Qurate Retail Inc.

E-commerce service provider Qurate Retail Inc (NASDAQ: QRTEA) was comparatively little affected by Covid-19. In fact, in the third quarter of 2020, revenue grew 10% to $3.4 billion, while it swung to a net profit of $338 million from a loss a year ago.

The Colorado-based retail giant planned well during the COVID-19 pandemic as its home-shopping platforms, which include flash e-sales site Zulily had a huge response, increasing its eCommerce revenue by 15% to $2.1 billion.

Analysts predict a sharp movement in this stock as its price movements were positive even when the entire retail segment was underperforming.

CarParts.com Inc.

Car Parts Inc (NASDAQ: PRTS), an online provider of aftermarket parts for automobiles, had a satisfying financial third quarter as net sales increased 69% to $117.4 million.

Net income improved significantly to $1.4 million, beating all the analyst’s estimates and performing better than the industry P.E. The California car accessories provider was successful in making the company a modern and scalable e-commerce company.

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Car Parts shifted to a new ‘Do it yourself’ approach, which was first time introduced in this segment, and came along with a new online platform for the customers. The company has declared a floating of 3 million new shares and might add more as 3.75 million, which will raise more than $57 million in new cash to grow the business.

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