These 6 retail stocks are smart purchases of coronavirus – Motley Fool


Retailers who have invested heavily in their supply chains and delivery infrastructure and have already started to switch to true omnichannel models prospered during the coronavirus pandemic.

Not all of the companies on this list will see any gain in sales during this period, and many, if not all, will report lower profits, since low-margin items are in most demand. But these six companies have shown their strength in finding ways to continue to serve their customers despite all of the operational challenges that businesses are currently facing.

A woman works in an Amazon warehouse.

Amazon has been working on adding 100,000 workers. Image source: Amazon.

1. Amazon

It is rare to buy a retail giant that is also strong in other areas at a reduced price. Amazon (NASDAQ: AMZN) closed at $ 1,906.59 on April 3, nearly $ 300 from its 52-week high. It is reasonable to assume that the company not only benefited from high demand during the pandemic, but probably signed new Prime members while adding customers to Amazon Web Services (AWS).

2. Walmart

Walmart (NYSE: WMT) had a decision to make a few years ago. It could build on its stores and do secondary digital, or it could become full omnichannel. He chose the latter and invested billions to be able to ship orders faster from his stores and warehouses. It has also built a same-day delivery grocery service and offers curbside pickup at many locations.

Investors noticed it and shares closed at $ 119.48 on April 3, just $ 9 lower than the chain’s 52-week high. Walmart has demonstrated its resilience and its ability to operate in almost any condition. This should help his shares reach new heights in the post-coronavirus world.

3. Target

Target (NYSE: TGT) has made many of the same moves that Walmart has made. He also purchased Shipt to speed up its ability to deliver same-day delivery.

Now the retailer is on the verge of posting big sales figures while many of its non-food competitors remain closed. The chain sells food, but it also offers office supplies, electronics and other things that are not essential but that are in demand.

Once the pandemic is over, the chain should quickly return to normal. He may not quickly return to his 52-week high of $ 130.24, but he will return shares of $ 92.57 closed on April 3.

4. Best Buy

Best buy (NYSE: BBY) has so far been the surprise winner of the current situation. The chain has closed its stores, but its website remains open and offers curbside pickup in many places.

This led to what the company called a “spike” in sales, with consumers looking to buy electronic devices for work at home, devices to store food and things to keep them entertained. It is not known how long this spike will last, but it is clear that the chain will not be devastated like many others. This should help its price recover from $ 53.48, where it closed on April 3, down from its 52-week high of $ 91.99.

5. Costco

Costco (NASDAQ: COST) was built for pandemics. He sells a limited selection of loose items. This makes it easier to store their shelves, as people expect to be able to buy toilet paper, paper towels and other items, and don’t really care about specific sizes or brands. The club warehouse also derives most of its profits from memberships (about 2/3) and has probably recovered a good number of them – the company has not made any public statement to this effect, but has recognized a higher demand than normal. .

Investors have clearly noticed this. Costco shares closed on April 3 at $ 288.65. This is down from their 52-week high of $ 325.26, but less of a drop than many retailers have experienced, and still leaves room for growth each time a recovery occurs.

6. Ollie’s Bargain Outlet

Ollie’s Bargain Outlet (NASDAQ: OLLI) may not be on everyone’s radar, but it’s a well-run business. During the pandemic, it shifted its supply chain to provide food and other essentials. When the coronavirus passes, the company should be well placed to buy products at low prices on orders canceled by other retailers.

Being a discount retailer selling an eclectic mix of items is a good thing at a time when many people will be on tight budgets. This should help Ollie recover from $ 44.59 and eventually return to his 52-week high of $ 103.03.

Buy carefully

All of these stocks could fall further and fall again when profits are declared. A prolonged recession could delay their long-term success, and it’s impossible to know when the world will return to something close to normal.

For long-term investors, however, these companies have shown that they have a solid foundation. This should mean that there will eventually be a day when their arrows point up and the numbers turn green.