Five Stocks For Your Thanksgiving Feast
Mark is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
It's that time of year again. Family dinners, football games, and the start of the Christmas shopping season. Some companies do 40% of their total annual business this time of year, so it can be a very important gage of economic activity. It will generate a lot of attention.
Wal-Mart (NYSE: WMT) plans to be open for "Black Friday" shopping on Thanksgiving evening, this is creating a firestorm among some workers who would rather be spending it with family and friends. There were reports that some would stage protests and strikes.
The company announced results last week and stated that there would be lower revenue this year than previously estimated. Earnings increased 9% and just beat expectations. Revenue was up just 1.5% for U.S. stores open at least a year. This did not please some analysts who were expecting slightly better performance.
Wal-Mart typically caters to families with incomes of $30,000 to $60,000 per year. However, those shoppers appear hesitant to part with their cash because of higher food and gasoline costs, and are hoping to see an improvement in their economic fortunes before going on a spending binge. The company is trying to counteract that and attract more buyers with deeper discounts, an improved layaway plan, and an increased assortment of merchandise.
Target (NYSE: TGT) has projected earnings of $1.64 to $1.74 for the current quarter, beating consensus expectations of $1.51. The more "upscale" discounter attracts shoppers with median income of around $64,000 who apparently feel slightly better about their finances this year.
The company is focusing on the higher-end income demographic by offering more luxury items for sale. It isn't emphasizing a layaway plan.
A company that some people say could have a blowout quarter is Apple (NASDAQ: AAPL). It is thought that 45 to 50 million iPhones and more than 25 million iPads could be sold from October to December, many of them in the U.S. Both numbers would be significantly up from last year. And revenues should easily top the 2011 total of $46 billion.
Last month, Apple reported earnings that did not quite meet consensus estimates, although it was off by only a few cents per share on the bottom line. Many people have written, I counted more than 16 million articles and blogs on this subject just in the week after the announcement, that the company mojo is declining and it is the beginning of the end of the long bull run for the tech giant. My thought is that I wouldn't count them out yet.
After the mad weekend rush is over, "Cyber Monday" will be upon us.
Will the nation’s number one online retailer will be ready? Amazon.com (NASDAQ: AMZN) reported less than stellar results, including a $28 million operating loss, on the same day as Apple, although it didn't create as much as a buzz in the blogosphere. Only one million articles were written on that subject. And most analysts gave the company a pass stating that the Amazon is sure to "get over its problems."
The company is facing headwinds and indicated reduced guidance going forward. The moat may be narrowing a bit for them. Some of the competition will come from the traditional brick and mortar stores. Wal-Mart plans to expand its same-day delivery service to more locations. Target offers free delivery when ordering items online for those who are part of its "RedCard" program.
Speaking of delivery, one of the best gages of economic activity during the holidays can come from looking at the shipping companies.
United Parcel Service (NYSE: UPS) is the world's largest package delivery company. It operates in over 220 countries, shipping more than 15 million packages per day and generating more than $53 billion in annual revenue. The company projected quarterly earnings of $1.34 to $1.44 per share, which was higher than many analysts’ expectations. Other shippers are indicating a rosy shopping season and some plan to hire additional workers to get through the Christmas crunch.
So after you eat your Thanksgiving feast and root for your favorite football team this year, get ready for the shopping frenzy. It looks like it could be a good year for many retailers.
Mathman6577 owns shares of Apple. The Motley Fool owns shares of Apple and Amazon.com. Motley Fool newsletter services recommend Apple, Amazon.com, and United Parcel Service. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!