The consumer is a large part of the economy and even though the general sentiment may be turning more bearish on retail sales, the stocks and numbers tell a different story. Granted, not all levels of retailers are experiencing the same boom since the bottom in 2009, but one niche sector is surprising even me. The online and television shopping sector continues to shine.
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Shopping Via Your TV
HSN Inc. (Nasdaq:HSNI) is best known for the HSN television network, otherwise known as the Home Shopping Network. Along with HSN there is also the HSN.com website and a number of branded catalogs and websites. The stock hit a new all-time high recently after it was recommended at a major hedge fund conference as a top stock pick. I personally have been a fan of HSNI because it is in a niche sector that tends to hold up well when the economy slows and booms when the consumer is buying. Fundamentally it is also attractive with a forward P/E ratio of 15.6 and price-to-sales of 0.67. The combination of strong fundamentals, technicals and the eye of hedge funds bodes well for the stock. (For more, see Time To Switch Shopping Channels?)
Liberty Media Interactive Inc. (Nasdaq:LINTA) markets and sells a range of consumer products globally, primarily through television and the internet. The company owns QVC networks, the television shopping channel that competes with HSN. The company also owns a stake in HSN, giving investors exposures to both shopping networks. The stock trades with a forward P/E ratio of 17.7 and price-to-sales of 1.16; both higher than its competitor. However, technically the stock has important support at the $17 area and could be a buy at that price.
ValueVision Media (Nasdaq:VVTV) is a multi-media retailer that sells and markets its goods to consumers mainly through its television shopping network, ShopNBC. The company also sells through ShopNBC.com and ShopNBC.TV. The small-cap company boasts a forward P/E ratio of 13.4 and price-to-sales of 0.57 - both attractive numbers for the sector. Technically the stock has tried to break to a new multi-year high several times above $7.25, but continually fails. A breakout would be the next buy signal.
It is impossible to talk about selling goods online without mentioning Amazon.com (Nasdaq:AMZN), the clear leader of selling anything and everything via the internet. The company is not a value play when compared to the television shopping companies with a forward P/E ratio of 49.6 and price-to-sales of 2.30. However, the major difference is that AMZN has higher growth prospects and therefore can realistically trade with higher valuations. Technically the stock is 10% off its all-time high set in early May and in the $180's could be a good place to start building a position.
The Bottom Line
The great thing about investing is that we do not have to choose to put our money behind only one consumer. The outlook for buying goods via the television and the internet are both bright and why not throw some money at both. My picks would be HSNI and AMZN, both are clearly leaders in their sectors. (For more, see Media Stocks Worth Watching.)
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