What I Learned About Retail Stocks While Shopping in South Florida

January 14th, 2014
in contributors

by George Leong, Profit Confidential

I'm not a shopper by any means but I just got back from my annual trip to South Florida where I was able to take a look at the retailers that appear to be attracting tons of traffic in the retail sector.

First of all, the big-time shopping mall in the Orlando area is the "Premium Outlets" mall chain. The operator of these discount outlet malls across America (which recently expanded into Canada), Simon Property Group, Inc. (NYSE/SPG), is a very interesting play on the retail sector. In each mall, there are often many more than 100 retailers from the top brand-name retail stocks in America.

Follow up:

As I walked around the mall, I noted what retailers were popular based on each store's traffic and the buying frenzy inside. Remember, consumer spending drives the economy and overall gross domestic product (GDP) growth, so business in the retail sector can be quite telling.

One of the top retailers was NIKE, Inc. (NYSE/NKE), which is a major attraction in the mall and one of the top stocks in the retail sector. While Under Armour, Inc. (NYSE/UA) has been increasing its market share, I continue to feel that NIKE is the "Best of Breed" in the sports apparel business in the retail sector.

In the youth apparel area, The Gap, Inc. (NYSE/GPS) was a major focal point in the mall, along with Banana Republic, which The Gap also operates. In the youth and early adult clothing market, The Gap has been successful in turning around its business over the past decade and is now a good pick to consider in the retail sector.

Also in the apparel market, Ralph Lauren Corporation (NYSE/RL), which continues to be a top player in the retail sector, was seeing decent business at its storefront in the mall. Ralph Lauren's signature horse and polo logo has become a trendy status symbol in the retail sector, which could be the reason why it seems to be drumming up business here.

In the luxury retail sector, stores in the mall that appeared to be attracting the most interest from consumers were Michael Kors Holdings Limited (NYSE/KORS) and Coach, Inc. (NYSE/COH). According to my wife, the lineups were out the door at these stores, as shoppers searched for significant sales. My top pick in luxury is Michael Kors (see "My Favorite Pick Among the Luxury Brand Stocks."), which has been successful in expanding its product line to include apparel, unlike Coach, which only offers handbags and accessories.

So in sum, the retail stocks I mentioned above are some of the best in the retail sector and are likely to provide some of the top buying opportunities for the retail investor.

This article What I Learned About Retail Stocks While Shopping in South Florida was originally published at Profit Confidential

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