5 Stocks Set to Rally

The coronavirus-led lockdown fueled a number of trends, one of those being the rapid shift to online shopping as brick-and-mortar stores remained shut during lockdowns.

Staying Indoors Boosts Online Shopping

The coronavirus pandemic compelled many retailers to shut down stores through March, April and May, driving the crowd to online platforms. Even though the economy is reopening, consumers continue to shop through online retail channels. This is because the lockdown measures may be easing but signs of resurgence of coronavirus and unavailability of a proper vaccine have been keeping people at home.

Moreover, e-commerce offers a lot many advantages over traditional retail. All items, from grocery, home furnishing to exotic meals, can be delivered to one’s doorstep. In fact, online channels offer greater convenience during thepandemic. Consumers do not need to worry about social distancing and avoid hassles like wearing a mask,which has been made a compulsion in brick-and-mortar stores.

Online retail sales in the United States rose more than 20% year over year in April. In fact, per eMarketer’s latest forecast, e-commerce sales are expected to grow 18% in 2020 to reach $709.78 billion, representing 14.5% of total U.S. retail sales this year.

According to Statista.com, the global online retail market will grow to more than $6.5 trillion by 2023 versus $3.5 trillion in 2019. In fact, in 2021, 2.1 billion shoppers are expected to order online.

What’s more? This shift in consumer behavior has boosted the logistics sector. This ever-increasing demand is building pressure on logistics players to increase efficiency even in packaging so that the cost saved can offer a competitive edge to shippers. In fact, shipping companies are now focusing more on shrinking order-to-fulfillment timelines as overnight delivery has become the most desirable option.

E-commerce giants are now adopting AR, smart speakers and an array of new technologies to engage consumers. Additionally, these companies are using sophisticated robotics to pick and pack, which help fast-track the process and lower costs.

Our Picks

This coronavirus pandemic has helped online retail stocks breakout in a big way so far in 2020. The Amplify Online Retail ETF has added 42.8% so far this year against the S&P 500 and SPDR S&P Retail ETF’s decline of 3.1% and 5.6%, respectively.

Looking at the current uptrend, this robust outperformance should keep going. Hence, we have shortlisted five online retailers which can make the most of this current boom.

eBay Inc. EBAY operates the marketplace and classifieds platforms that connect buyers and sellers. The company’s expected earnings growth rate for the current year is nearly 23% compared with the Zacks Internet – Commerce industry’s estimated earnings growth of 3.2%.

The Zacks Consensus Estimate for its current-year earnings has climbed 12.6% over the past 60 days. eBay sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Wayfair Inc. W engages in home development e-commerce business. Shares have jumped more than 100% so far this year as customers engage in home renovation and re-designing amid the pandemic.

The company’s expected earnings growth rate for the current quarter is more than 100% against the Zacks Internet – Commerce industry’s estimated earnings decline of 41.5%. The Zacks Consensus Estimate for its current-year earnings has climbed 50.9% over the past 60 days. Wayfair sports a Zacks Rank #1.

JD.com, Inc. JD operates as an e-commerce company and retail infrastructure service provider. The company’s stocks soared more than 70% so far in 2020 on the back of accelerating e-commerce adoption throughout China.

The company that belongs to the Zacks Internet – Commerce industry has an expected earnings growth rate for the current year is 20.2%. The Zacks Consensus Estimate for its current-year earnings has climbed 76.1% over the past 60 days. JD.com sports a Zacks Rank #1.

Amazon.com, Inc. AMZN engages in the retail sale of consumer products and subscriptions. This e-commerce giant owns nearly half of the U.S. e-commerce market. Additionally, the pandemic helped first-quarter net sales to rise 27% year over year – its best growth rate in years.

The company’s expected earnings growth rate for the next quarter is 18.4% against the Zacks Internet – Commerce industry’s estimated earnings decline of 44.7%. The Zacks Consensus Estimate for its current-year earnings has climbed 1.7% over the past 60 days. Amazon carries a Zacks Rank #2 (Buy).

Etsy, Inc. ETSY operates online market places for buyers and sellers. The company witnessed more than 100% growth for Etsy Marketplace in the month of April accompanied by a surge in web traffic, search interest and app download volumes.

The company’s expected earnings growth rate for the current year is 46.1% against the Zacks Internet – Services industry’s estimated earnings decline of 2.1%. The Zacks Consensus Estimate for its current-year earnings has climbed more than 100% over the past 60 days. Etsy carries a Zacks Rank #2.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it’s predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce “the world’s first trillionaires,” but that should still leave plenty of money for regular investors who make the right trades early.

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