Sunday, December 11, 2011

5 Retail Stocks to Buy in 2012

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tdp2664 InvestorPlace In early December, we got tangible proof that the retail sector is alive and well. Black Friday weekend, the biggest shopping weekend of the year for the U.S., brought in a record 226 million shoppers. That blew away analysts, who expected to see only 152 million shoppers. This increased foot traffic spelled major sales growth: Black Friday weekend sales climbed 16.7% over last year, representing a record $52.4 billion. And that doesn't even count Cyber Monday, which brought in an additional $1.25 billion in sales, a 22% jump from the same day last year. Of course, the question on everyone's mind is whether this sales growth is sustainable. Will Americans continue to shop going into 2012? For me, it's a no brainer — the retail sector is at the center of a powerful emerging trend, and it's not just due to the holiday shopping season: Consumers are getting more confident, and their disposable incomes are rising. Recently, the Conference Board announced that consumer confidence made the biggest monthly gain in more than eight years. And now consumers have a little more money to put where their mouths are: Real disposable income (after-tax income adjusted for inflation) rose 0.3% in October, representing quite an uptick after September's 0.1% decline. So, long story short, the retail sector is humming along, and I expect this growth to persist. The following stocks have tremendous upside, so be sure to pick up some of these retail gems if you haven't already. Crocs (NASDAQ: CROX ) is reinventing its brand from the top down. First, it’s moving away from its previous one-size-fits-all model by offering more than 250 styles of footwear. The latest styles include a Disney collection for children, sleek loafers and even a new line of golf shoes promoted by coach legend Hank Haney (to be launched in spring 2012). And it's not just the Crocs themselves that are getting revamped. The company's store locations are also getting a facelift, starting with new concept stores in three of the nation's largest malls. With a little help from design firm Callison, the architecture is designed to entice window shoppers inside and get them to interact with the shoes. With all of these plans in the works, I'm excited to see how consumers react to the new Crocs. CROX is currently trading at a bargain price, and I expect tremendous upside going into the New Year. 2012 Estimated Sales Growth: 16.5% 2012 Estimated Earnings Growth: 19.7% Melco Crown Entertainment (NASDAQ: MPEL ) packs a one-two punch of being a tremendous entertainment industry play as well as a China play. The company develops and owns casinos and resorts in Macau, which is quickly becoming the gambling capital of the world. And as a major player in Macau, Melco Crown Entertainment is poised to welcome the growing ranks of wealthy Chinese and tourists. This means that Melco is at the receiving end of some serious profits: In July, August and September, Macau's gaming revenue jumped 48%, 57% and 39%, respectively. Analysts have high hopes for this company: For the upcoming quarter, the Street expects 367% earnings growth. This is the kind of stock that anyone can have fun with. 2012 Estimated Sales Growth: 7.7% 2012 Estimated Earnings Growth: 19.1%



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