Black Friday Investing: Take Advantage Of Surging Sales

| December 1, 2010 | 0 Comments

It’s officially the holiday season here in Phoenix.

There’s a chill in the air and twinkling lights are everywhere.  Wreaths are hung and inflatable snowmen are sprouting up on desert “lawns” across town.

I use the word “lawns” rather lightly…

Due to our hot climate, many Phoenix lawns are a collection of cactus, shrubs, and hard bare dirt.  A few well-placed rocks are thrown in for good measure.

It’s not exactly the picturesque winter scene from a holiday card…

I grew up in Montana so I’m used to cold and snow.  Where I’m from, December is filled with wintery weather and warm fireplaces… just what I need to get in the holiday spirit.

Since there’s not a snowflake to be found here in Phoenix, I find myself forgetting we’re entering the season of giving…

It’s the biggest month of the year for retailers.  Shoppers are filling the aisles looking for the perfect gift.

“Black Friday” marked the beginning of the holiday shopping season…

The next few weeks will be a shopping frenzy.  Retailers wait all year for the holiday surge.  For many, sales in the next month will make or break their bottom line for the whole year.

So getting shoppers in the door is a priority…

Most stores were offering deep discounts on the “Black Friday Weekend” after Thanksgiving.  The post-turkey shopping spree is the largest of the year.

Last weekend was very successful.  In fact, according to the National Retail Federation (NRF), an estimated 212 million shoppers visited stores and websites over the weekend.

That’s a solid 8% jump over the 195 million visits in the same weekend last year.

This year’s visits turned into an estimated $45 billion in spending.  Not too shabby for the slowly improving economy.

But the really important sales data comes out Thursday… chain store sales.

Leading retailers report November sales on Thursday.  These sales numbers are normally a good indicator of retail sales and shopping trends.  What they reveal will set the tone for the stock of retailers through the end of the year.

Many analysts are expecting stores like Macy’s (M), Target (TGT), and J.C. Penney (JCP) to beat sales estimates by a wide margin.  If they do, we could see a nice run in these stocks through year-end.

But retailers aren’t the only ones who’ll benefit from a robust holiday shopping season.

Consider the shipping companies…

United Parcel Service (UPS) and FedEx (FDX) are expecting increased shipping this holiday season.  And of course, higher deliveries equal higher revenues.

UPS expects a 7.5% rise in holiday shipments while FDX sees a rise of 11%.

What’s causing the jump in shipments?

The slowly improving economy is only part of the reason.

A big part of the growing shipments are coming from the large number of online shoppers.  The NRF reports people who do their holiday shopping online has nearly doubled since 2006.

Nearly 60 million people shopped online on “Cyber Monday” four years ago.  But this year, retailers saw over 110 million consumers shopping online for gifts.

The more people buy online, the more packages UPS and FDX get to deliver…

With online purchases accounting for a larger segment of total holiday sales, shipping companies are seeing green.  FDX and UPS may be a nice way to add some green to your portfolio as well.

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Category: Stocks

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.

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