4 Top eCommerce Stocks for the Holiday Season
Cyber Monday online sales increased 12.1% this year compared to 2015, due to massive growth in mobile traffic and sales. As per Adobe Digital Insights, Cyber Monday sales reached a record $3.45 billion, much better than the initial estimate of $3.36 billion.
Per Adobe, mobile shopping accounted for 47% of visits to retail websites and 31% of sales. According to recode, smartphones accounted for more than one out of every five sales. Further, improved mobile shopping apps helped brick-and-mortar stores like Walmart, Kohl and J.C. Penney to cash in on this trend.
Cyber Monday marks the ending of the five-day shopping season that begins on Thanksgiving. Although Cyber Monday touched record figures this year, sales was only 3% higher than that of Black Friday sales, which rose 21.6% year over year to $3.34 billion. Adobe expects Black Friday sales to exceed Cyber Monday next year.
Per Adobe, combining Black Friday and Thanksgiving, online sales were almost $5.27 billion, up 17.7% on a year-over-year basis. Black Friday became the first day in retail history to drive over one billion dollars in mobile sales at $1.2 billion, a 33% growth on a year-over-year basis.
Consumer Preference Key Differentiator
The above figures reflect continuous shift to online shopping instead of a physical visit to a Brick-and-Mortar store. Convenience of mobile shopping is largely responsible for consumer behaviour this year along with lower-priced goods, free shipping and product availability.
Moreover, rising wages and personal income as well as steady hiring has been attributed as key catalysts for this year’s online sales. Moreover, consumer confidence rose to a five-month high in early November. The University of Michigan said that its preliminary index of sentiment for the month climbed to 91.6 from 87.2 in October.
Per Adobe, top-selling electronic items in terms of units on Cyber Monday were the Sony PlayStation 4, Microsoft’s Xbox, Samsung 4K TVs, Apple iPhone, and Amazon Fire. As for toys, shoppers snapped up Lego sets, Nerf, Shopkins, Barbie, and Pie Face Game.
Trump Win Makes Markets Optimistic
Although the elections played havoc with retail sales in early November, the situation has improved fairly post the results. The record sales over the Thanksgiving-Cyber Monday will further instil confidence in the market.
Trump’s proposal of expansive government spending, lesser financial regulation and increased prospects of tax cuts is anticipated to boost economic growth as well as increase inflation and interest rates. Moreover, declining farm prices and lower gas prices are expected to encourage people toward spending this holiday season.
This year, the holiday season is set to be the largest online shopping affair-to-date, with expected year-over-year growth of 11% and $91.6 billion in total sales. The National Retail Federation expects online holiday sales in November and December to rise 7% to 10% to as much as $117 billion from a year ago. Moreover, research firm eMarketer estimates eCommerce sales to rise 17% this holiday season, five times faster than in stores.
Our Picks
Given the bullish trend, eCommerce stocks are preferable choice for investors ahead of the holiday season. We have selected four stocks that currently flaunts a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..
El Segundo, CA-based Stamps.com Inc STMP provides Internet-based services for mailing or shipping letters, packages or parcels anywhere in the U.S. The company has beaten the Zacks Consensus Estimates in all the trailing four quarters, with an average positive surprise of 66.72%.
STAMPS.COM INC Price and Consensus
STAMPS.COM INC Price and Consensus | STAMPS.COM INC Quote
The Zacks Consensus Estimate for 2016 earnings has risen by $1.08 (19.8%) to $6.53 per share in the last 30 days. The company’s expected growth rate for the current is 66.1%. In the last six months, the company has given a return of almost 21.5% as compared with Zacks Electronic Commerce industry’s gain of 9.92%.
Argentina-based Mercadolibre Inc. MELI hosts online commerce platforms in Latin America and, has a real estate classified platform that covers various areas in Florida. The company has beaten the Zacks Consensus Estimates in all the trailing four quarters, with an average positive surprise of 23.58%.
MERCADOLIBRE IN Price and Consensus
MERCADOLIBRE IN Price and Consensus | MERCADOLIBRE IN Quote
Current year earnings estimates have remained steady at $2.79 per share in the last 30 days. The company’s expected growth rate for the current year is 28.6%. In the last six months, the company has given a return of almost 19.4% as compared with Zacks Electronic Commerce industry’s gain of 9.92%.
Headquartered in Chicago, IL, Groupon Inc. GRPN operates a website that offers daily discount deals. Through its Local Deals, the company acts as a third-party marketing agent and sells vouchers known as Groupons, which users can redeem against products or services at merchant locations.
Groupon has a Zacks Rank #2. Further, the company has outperformed the Zacks Consensus Estimates in the last four quarters, with an average positive surprise of 31.07%.
GROUPON INC Price and Consensus
GROUPON INC Price and Consensus | GROUPON INC Quote
Moreover, the Zacks Consensus Estimate for 2016 has narrowed down by three cents to a loss of 19 cents per share in the last 30 days. The stock has returned almost 11.9% in the last six-months as compared with Zacks Electronic Commerce industry’s gain of 9.92%.
Shanghai-based Ctrip.com International Ltd. CTRP is a leading travel service provider of hotel accommodations, airline tickets and packaged-tours in China. The company has outperformed the Zacks Consensus Estimate in the last four quarters, with an average positive surprise of 50.32%.
CTRIP.COM INTL Price and Consensus
CTRIP.COM INTL Price and Consensus | CTRIP.COM INTL Quote
The Zacks Consensus Estimate for fiscal 2016 has narrowed down by eight cents to a loss of 66 cents per share in the last 30 days. The company’s expected growth rate for the current year is 65.4%.
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