5 Bargain Stocks To Grab For Black Friday
Zacks Investment Research | Nov 22, 2016 08:38PM ET
The biggest bargain hunt of the year is about to commence. As Friday approaches, shoppers are preparing to pick up the best shopping deals of the year. Known as Black Friday since the early 1930s, this is the day which accounts for nearly 30% of retailers’ annual revenues. Encouraging initial estimates of retailers’ sales during this period typically help markets close higher.
During this time, the focus remains squarely on retailers' stocks. Most investors look to select those that have also gained from recently released quarterly results. But why neglect other great stocks with strong fundamentals available at great bargains? When the focus is on growth stocks, it may a good time to pick up strong value choices available at affordable prices.
Cheap Stocks Back in Favor
It couldn’t be a better time to focus on value stocks. Neglected since the 2008 financial crisis, they have returned to popularity this year. Over the year, U.S. value stocks have gained three times more than growth stocks and are close to their best performance in 10 years. According to data from Bloomberg, the valuation of this group is the highest in seven years compared to growth stocks.
This reversal of fortunes is largely attributable to a more favorable investment climate. Following an extended period of steady job gains, the Federal Reserve is on the verge of raising rates. Meanwhile, Donald Trump’s surprise presidential victory has led to expectations of higher growth and inflation. Trump’s policy proposals have sparked off speculation that several industry friendly measures will be implemented soon.
Profiting from the Black Friday Boost
As Black Friday approaches, investors will also be looking to profit from the impetus markets receive from retailers’ initial estimates. Traditionally, markets finish higher on Monday compared to their closing level before Thanksgiving if such numbers are favorable in nature.
According to the National Retail Federation, retail sales are expected to rise 3.6% during this year’s holiday season. Further, around 74% of shoppers will choose Black Friday compared with a 21%, 47% and 24% respectively on Thanksgiving Day, Small Business Saturday and Sunday. (Read: Zacks Investment Research
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