Best 'Back-to-School' Stocks for 2016
In this article, I will discuss:
1. The stocks that I think will grow during the back-to-school shopping spree
Back-to-school shopping is growing. According to the National Retail Federation (NRF), total (K-College) back-to-school spending is expected to increase by over $7.8 billion (11.47%) since last year. This is a great indicator that stocks in this sector are poised to grow in the short-term. However, with so many companies in this sector, who stands to gain the most? Here's who I think will win this back-to-school season.
The "All-Around" Player:
From clothes to school supplies to phone, Amazon covers anything you need. According to a recent NRF survey, 46.0% of back-to-school shoppers plan to shop online. Amazon also has a Amazon Prime Student membership. This is where college kids could get regular Amazon prime membership for half off and many more perks. Amazon also has a huge presence in teenage online shopping, raking in more than 41% of all sales from this sector. With parents and college students having such little time shop, Amazon is a convenient tool that both groups can use to purchase anything they need for the new school year without ever having to leave the couch.
The Clothing Pick:
In that same survey, 60.5% of back-to-school shoppers said they would shop at discount stores. With this data, I think that TJX Companies is a solid pick. With Amazon's assault of the traditional retail store, TJX subsidiaries (TJ Maxx, Marshalls) have been the few stores that have thrived. Since these stores offer such low prices, it is very attractive for the average consumer looking to buy a couple of clothes. This is the same scenario parents and college students will face when school starts. Also, TJX Companies' cheap prices allow for consumers to save more money to buy other back-to-school necessities like school supplies.
The most obvious pick:
At its core, back-to-school shopping comes down to two things: school supplies and apparel. We've already been over the apparel side of things. So, when it comes to school supplies, I think Staples is the place to be. Staples has the best reputation of any company that sells school supply products, making this company an obvious choice for this back-to-school season. Additionally, the amount that consumers are going to spend on school supplies during this back-to-school season is expected to increase by an average of $10.02 (10.25%). I think that, with all these factors in mind, Staples would be a great trade during this back-to-school season.
Please read my disclaimer before taking any financial action