Despite the stock market’s all-time highs, there’s one sector that’s been hitting some serious lows recently. In fact, the sector’s top exchange traded fund (ETF) is already down 3.1% year-to-date compared to this time last year and has fallen 12% from its 52-week high.
The outlook is even grimmer, with some pundits predicting the “extinction” of this particular sector in the future. Even JPMorgan Chase & Co., the largest bank in the U.S., is recommending its clients take a bearish approach to trading the sector.
But these three stocks have not only emerged as survivors of 2017’s worst-performing sector…
Home Depot hasn’t gone entirely online, but most of what people need from this retailer has to be seen in person. After all, it’s hard to make big home improvement purchases without actually seeing it for yourself first. For that reason, their brick and mortar stores are doing – and will continue to do – very well. As the largest home improvement chain in the U.S., Home Depot continues to capitalize on an improving housing market with the type of same-day sales that attract even the shoppers who otherwise swear to shopping only online.
The stock is also hitting all-time highs right now, which reflects a retail space with plenty of room to grow. I don’t see this trend letting up, either, as earnings continue to beat expectations. And when you look at the chart above, you’ll notice that volatility of this stock is closing in on annual lows… another great bullish sign. In fact, I predict HD hitting $150 this year.
Although Wal-Mart had to play a bit of catch-up with their online experience, keep in mind that this chain bucks the trend of department stores for two reasons: they keep their prices low and most of what they sell are considered necessities (like food and pharmaceuticals). So you’re not going to waste your time taking a trip to the mall or placing an online order for something you need right now.
The stock hasn’t exactly rebounded in price and has actually traded lower since Trump’s election victory. WMT has also dropped off its 12-month highs since August 2016, but as continued positive earnings come in, I predict this stock becoming a value play at $65 per share. I’m targeting the top side of the range this year, and expect WMT to be back at the $75 resistance level soon.