3 actions to revive the shopping center

While we know that 2020 has been a terrible year for most retailers, investors might be surprised to learn that there are some promising signs in the brick and mortar retail space right now. Earlier this week, we saw April retail sales in the United States stand at $ 619.9 billion, up 51.2% from a year ago. You also have tons of people returning to malls thanks to the COVID-19 vaccine rollout. Combine that with all of the stimulus payments that have been sent over the past year and you have a recipe for a rebound in most major retail stocks.

It is difficult to determine whether this rebound in shopping center activity is a long-term trend or just transitory, especially given the rise of e-commerce. That said, there are more than a few retail stocks that could recover in the near term that are worth considering right now if you are looking to potentially profit from the trend. Let’s take a look at 3 actions to play the revival of shopping centers.

Macy’s (NYSE: M)

Many investors left Macy’s for dead last year, as people simply weren’t visiting physical stores during the pandemic. Don’t rule out this iconic retailer just yet, as it’s one of the best ways to play the rebound in retail sales. Macy’s operates retail stores, websites and mobile apps under well-known brands such as Macy’s, Bloomingdale’s and Blue Mercury. The company sells a variety of different merchandise such as clothing and accessories, cosmetics, home furnishings and other consumer goods.

There are some things people like to buy in person, and many of the products Macy’s sells fall into this category. The company also just posted a surprise first-quarter profit and raised its full-year outlook, both signs that things are improving for the beleaguered retailer. First quarter comparable sales grew 62.5% year-over-year and Macy’s also saw digital sales growth of 34% year-over-year, which tells us that the company is experiencing positive momentum in its e-commerce sales channel. Macy’s has a lot of questions to answer in the long term, but in 2021, it’s a business that could surprise investors in a good way.

Simon Property Group (NYSE: SPG)

If you want to take advantage of a rebound in pedestrian traffic in shopping malls, why not turn to one of the world’s largest commercial real estate owners? Simon Property Group is a real estate investment trust that owns, develops, manages, leases and acquires regional shopping centers and community shopping centers. Simon owns or has an interest in 235 properties in 37 different states. What is also important to note here is that Simon’s properties are in attractive locations which is very important in the increasingly competitive retail industry.

Simon Property Group is also interesting because the company has access to a lot of capital which allows it to take advantage of potentially lucrative investment opportunities. For example, the company recently acquired discount retailer Eddie Bauer as part of the company’s joint venture with Authentic Brands. Simon posted decent first quarter results that beat estimates, and the stock is offering investors a 4.25% dividend yield for now, which looks secure for now. Add this one to your shopping list if you want a smart way to play malls recovery.

L Brands (NYSE: LB)

Last on our list is L Brands, one of the best specialty retailers to consider right now. This company mainly focuses on intimate wear and other women’s clothing, personal care, beauty products and home fragrance. With classic brands like Victoria’s Secret and Bath & Body Works, L Brands’ physical retail stores can be found in most malls around the world and could see sales increase as foot traffic picks up. L Brands plans to split Victoria’s Secret and Bath & Body Works into new publicly traded companies in the near future, which should be seen as a positive step that can generate shareholder value.

This is a retail stock that has been surprisingly strong in 2021 and has grown by over 75% since the start of the year. The company has worked hard to improve its fundamentals, which should be applauded by investors as well. L Brands is releasing its first quarter results after the May 19 bell, and if the company performs well, the stock could head to new 52-week highs. Keep an eye out for this one if you’re interested in a retail stock that has shown great relative strength this year.

Should you invest $ 1,000 in Macy’s right now?

Before you consider Macy’s, you’ll want to hear this.

MarketBeat tracks Wall Street’s top-rated and top-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts quietly whisper to their clients to buy now before the wider market takes hold … and Macy’s was not on the list.

While Macy’s currently has a “Hold” rating among analysts, top-rated analysts believe these five stocks are better bets.

See the 5 actions here

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Peggy P. Gilmore