Weâ€™ve started to hear the fallout from the 2013 holiday shopping season during the last few weeks. Let me tell you, itâ€™s not looking pretty. A number of retailers — Sears, The Gap (GPS), JC Penney (JCP), American Eagle Outfitters (AEO), Bed Bath & Beyond (BBBY) and Pier 1 Imports (PIR), among others — cut their respective outlooks due to disappointing holiday season. That news has been followed with dire stories about the state of Sears, as well as fresh layoffs and store closures by the struggling JC Penney. The consumer electronics front did not fare much better, given dire results from Best Buy (BBY) and hhgregg, Inc. (HGG).
To me, this news simply confirms the action that I alerted subscribers to during early November in my trading service, PowerTrader. Those subscribers netted big profits in the shares of United Parcel Service (UPS) and Visa (V), as well as a 229% return on the corresponding Visa option play that I recommended. The driver behind those recommendations was the intersection of my Cash Strapped Consumer PowerTrend and the shift to online shopping that is a part of my Always On, Always Connected PowerTrend. As I have shared with my subscribers, I love PowerTrend investing for a number of reasons and the only thing more powerful is when two or more PowerTrends intersect in a given companyâ€™s business.
As if the retailer news wasnâ€™t enough, weâ€™ve started to get, at best, mixed results when it comes to December. Alcoa (AA) kicked off the tepid results and soon was followed up by Dow components Goldman Sachs (GS) and United Health (UH) issuing weak results. Yet, companies like wireless semiconductor Skyworks Solutions (SWKS) reported better-than-expected results and traded higher following those results. Skyworks has been a solid performer for my subscribers during the last few months, not just because of its key position with the whoâ€™s who in smartphones and tablets, but also because it is primed to ride the wave of The Connected Home, The Connected Car, wearables and, as John Chambers of Cisco (CSCO) calls it, The Internet of Things. That makes the company a pole-position play on my Always On, Always Connected PowerTrend.
Read more about the investing trends which could impact retail in 2014 and beyond at Eagle Daily Investor.
Sign up to the Human Events newsletter