Black Friday Investing: Take
Advantage Of Surging Sales
The Dynamic Wealth Report
December 1, 2010
by Justin Bennett, Editor
It’s officially the holiday season here in Phoenix.
There’s a chill in the air and twinkling lights are everywhere. Wreaths
are hung and inflatable snowmen are sprouting up on desert “lawns”
across town.
I use the word “lawns” rather lightly…
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Due to our hot climate, many Phoenix lawns are a collection of
cactus, shrubs, and hard bare dirt. A few well-placed rocks are thrown
in for good measure.
It’s not exactly the picturesque winter scene from a holiday card…
I grew up in Montana so I’m used to cold and snow. Where I’m from,
December is filled with wintery weather and warm fireplaces… just what I
need to get in the holiday spirit.
Since there’s not a snowflake to be found here in Phoenix, I find myself
forgetting we’re entering the season of giving…
It’s the biggest month of the year for retailers. Shoppers are filling
the aisles looking for the perfect gift.
“Black Friday” marked the beginning of the holiday shopping season…
The next few weeks will be a shopping frenzy. Retailers wait all year
for the holiday surge. For many, sales in the next month will make or
break their bottom line for the whole year.
So getting shoppers in the door is a priority…
Most stores were offering deep discounts on the “Black Friday Weekend”
after Thanksgiving. The post-turkey shopping spree is the largest of the
year.
Last weekend was very successful. In fact, according to the National
Retail Federation (NRF), an estimated 212 million shoppers visited
stores and websites over the weekend.
That’s a solid 8% jump over the 195 million visits in the same weekend
last year.
This year’s visits turned into an estimated $45 billion in spending. Not
too shabby for the slowly improving economy.
But the really important sales data comes out Thursday… chain store
sales.
Leading retailers report November sales on Thursday. These sales numbers
are normally a good indicator of retail sales and shopping trends. What
they reveal will set the tone for the stock of retailers through the end
of the year.
Many analysts are expecting stores like Macy’s (M),
Target (TGT), and
J.C. Penney (JCP) to beat sales estimates by a wide margin. If they do,
we could see a nice run in these stocks through year-end.
But retailers aren’t the only ones who’ll benefit from a robust holiday
shopping season.
Consider the shipping companies…
United Parcel Service (UPS) and FedEx (FDX) are expecting increased
shipping this holiday season. And of course, higher deliveries equal
higher revenues.
UPS expects a 7.5% rise in holiday shipments while FDX sees a rise of
11%.
What’s causing the jump in shipments?
The slowly improving economy is only part of the reason.
A big part of the growing shipments are coming from the large number of
online shoppers. The NRF reports people who do their holiday shopping
online has nearly doubled since 2006.
Nearly 60 million people shopped online on “Cyber Monday” four years ago. But this year, retailers saw over 110 million consumers shopping online
for gifts.
The more people buy online, the more packages UPS and FDX get to
deliver…
With online purchases accounting for a larger segment of total holiday
sales, shipping companies are seeing green. FDX and UPS may be a nice
way to add some green to your portfolio as well.
• Cotton (Under $1.20 a pound)
Cotton prices are weakening in recent trade. A supply/demand imbalance
sent cotton prices into the stratosphere from August to early November. But now prices are falling as cotton futures were severely overbought
just two weeks ago.
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