Historically, retail stocks run up in anticipation of the holiday season. Once its finally here, many of the gains amy be built in already.
Source: Birinyi Associates
MarketBeat Breaks it down for us:
"Analysts at Birinyi Assoc. looked at the historical performance of various retailers after [BLack Friday] through the end of the year and found that, though shoppers are buying goods in their stores, investors are selling their stocks. During this bull market, which began in 2002, all six groups of retailers Birinyi examined have negative returns from Thanksgiving through year-end, underperforming the S&P 500, which is generally flat during that time period.
The worst-performing stocks have been consumer-electronics names, which have lost, on average, 9.1% in the post-Thanksgiving period. The best are clothing retailers, which have lost a mere 1.4%. Going back to 1996, the picture looks a little better. Clothing retailers, general merchandisers and home-improvement stocks have shown positive returns in the Thanksgiving-to-New Year’s period, with gains of 1.75%, 2.74% and 6.31%, respectively, beating the S&P 500’s 0.82% return during that time. But consumer-electronics stores, department stores and specialty retailers have all posted negative returns. Electronics retailers have done the worst, with average losses of 4.39%.
Good stuff . . .
Buying Retailer Goods, Selling Retailer Stocks
WSJ Marketbeat, November 24, 2006, 10:48 am