September 5, 2017

These cheap retail stocks can hold their own against Amazon

When it comes to consumer stocks, it's the best of times and the worst of times.  

On the plus side, consumer sentiment is strong. The Conference Board's measure of consumer confidence hit a 16-year high a few months back, and there's little sign of a slowdown. July retail figures released a few weeks ago were the best they've been all year.

Yet retail and consumer stocks have been toxic despite these broader metrics. The SPDR S&P Retail ETF XRT, +1.35%  , for example, is down more than 15% in the past two years vs. a 25% gain for the S&P 500 SPX, +0.20%  ; this year so far the fund is down 10% vs. a 10% gain for the S&P 500

Are consumer stocks and traditional retailers dead forever? Or are they poised for a comeback as the all-important holiday shopping season kicks off?

Unfortunately, there are no easy answers. Certain segments of specialty retail have remained resilient, while others look to be down for the count. But take a closer look at the fundamentals of these three specific companies after their recent earnings reports. Each of them a good chance of mounting a late-2017 comeback, particularly if consumer sentiment stays strong:

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