Tech Ideas: Should You Be Buying Electronics Stores?
December retail sales came in weaker than expected, but the biggest disappointment came from electronic store sales. They were downright dismal.
While general sales (total retail and food service) were up 7.7% from last year, electronic stores rose a mere 0.4%.
Retail rose 7.9%, and motor vehicle and parts dealers were up 9.9% in the same time period. Furniture and home furnishing stores reported a 1.9% gain.
Goldman Sachs explains
Business Insider capturedGoldman Sach's explanation for weak electronic sales: "The weaker-than-expected retail sales result largely reflected declines in sales by electronics stores and "non-store retailers," which includes online sales."
Another reason is "a payback" from iPhone sales. Apple's iPhone 4S is credited for the surge in electronic sales in October and November, so it's reasonable the same consumers are paring back their electronic spending in the months following. In addition, an "aggressive promotional activity in November by some electronics retailers could possibly explain this pattern."
Business Section: Investing Ideas
Interested in tracking the trends affecting electronics stores? We've compiled a list of major electronic stores listed on U.S. markets. For each stock, we'll list the performance over the last year.
Use this list as a starting point for your own analysis. List sorted by performance over the last year. (Click here to access free, interactive tools to analyze these ideas.)
1. Conns (NAS: CONN) : Operates as a specialty retailer of home appliances, consumer electronics, home office equipment, lawn and garden products, mattresses, and furniture in the United States. The stock has gained 161.92% over the last year.
2. GameStop (NYS: GME) : Operates as a retailer of video game products and personal computer (PC) entertainment software. The stock has gained 20.75% over the last year.
3. Best Buy (NYS: BBY) : Operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. The stock has lost 28.85% over the last year.
4. RadioShack (NYS: RSH) : Engages in the retail sale of consumer electronic goods and services through its RadioShack store chain and kiosk operations. The stock has lost 38.83% over the last year.
5. hhgregg (NYS: HGG) : Operates as a specialty retailer of consumer electronics, home appliances, and related services. The stock has lost 44.98% over the last year.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
List compiled by Eben Esterhuizen, CFA. Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Data sourced from Finviz.
At the time this article was published The Motley Fool owns shares of GameStop, RadioShack, and Best Buy. Motley Fool newsletter services have recommended buying shares of hhgregg. Motley Fool newsletter services have recommended writing covered calls in Best Buy. Motley Fool newsletter services have recommended writing covered calls in GameStop. 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.
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