By Scott Rubin

Among the best market vehicles to play a cyclical upturn in the domestic U.S. economy is through retail apparel stocks. The consumer cyclical sector as a whole has vastly outperformed the S&P 500 as a whole in 2012, rising 18.64% versus a gain of 8.74% for the S&P, and a number of retail apparel stocks are among the leaders in this segment of the market.

In order to find promising long ideas in the retail space, I ran a simple scan to pinpoint some specific names. The metrics that I used singled out apparel stocks that a majority of Wall Street analysts have Buy ratings on, and that are up at least 20% year-to-date.

Below, Benzinga highlights 7 names that met the criteria and could rev up investors' portfolios heading into the second half of the year.

Foot Locker (FL) - This company has been able to capitalize on the ongoing bull market in shoes. It may sound silly, but the shoe bull market is very real, and has been lining investors' pockets in recent years.

In 2012, FL shares have risen nearly 28% and are currently sitting near a new 52-week high. In addition to the stock's growth properties, FL also yields 2.36% at current levels.

Hot Topic (HOTT) - This small-cap teen retailer has benefited from the rally in risk assets to start the year. The stock has gained 50% since January 1 and is currently trading at $9.95. The stock has created a high base pattern over the last couple of months and could experience a powerful breakout from current levels.

In addition to being a good vehicle to play a continued rally in the stock market, HOTT also yields a very healthy 3.23% at current levels.

Michael Kors Holdings (KORS) - This company went public in December 2011 and has been a must own retail stock ever since. A number of well known hedge funds such as Lone Pine Capital and Citadel are major holders of this name - and for good reason. Year-to-date, KORS shares have surged 56% at current levels.

Limited Brands (LTD) - With brands such as Victoria's Secret and Bath & Body Works, Limited Brands is a major player in the retail space. Not only are shares up more than 22% in 2012, the stock also provides investors with a nice 2.03% dividend yield at current levels.

Ross Stores (ROST) - This well-managed discount retailer has been a long-term winner with a gorgeous stock chart. Shares are up roughly 250% over the last 5 years, and the stock is currently sitting at new all-time highs.

Year-to-date, ROST has rewarded shareholders with a 27% gain. With the stock breaking the $60 level to the upside on Wednesday, this is a name to keep a close eye on in the coming weeks.

rue21 (RUE) - Since hitting a 52-week low of around $20.00 in January, RUE has caught fire. The stock is already up 38.45% in 2012 and is threatening to trade through the $30.00 level.

This area has provided resistance in the name a couple of previous times, and a breakout from this level could trigger more gains in RUE in the coming weeks.

Zumiez, Inc. (ZUMZ) - This is another teen retailer which has been racking up big gains in 2012. As of the close on Wednesday, the stock had jumped more than 29% in 2012, including 4% in the most recent trading session.

With shares recently breaking through $35.00, the next rally could send the stock up close to the $40.00 level in short order.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

(c) 2012 All rights reserved. This material may not be published in its entirety or redistributed without the approval of Benzinga.

Related Articles
  1. Mutual Funds & ETFs

    What Exactly Are Arbitrage Mutual Funds?

    Learn about arbitrage funds and how this type of investment generates profits by taking advantage of price differentials between the cash and futures markets.
  2. Investing News

    Ferrari’s IPO: Ready to Roll or Poor Timing?

    Will Ferrari's shares move fast off the line only to sputter later?
  3. Stock Analysis

    5 Cheap Dividend Stocks for a Bear Market

    Here are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
  4. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  5. Fundamental Analysis

    Use Options Data To Predict Stock Market Direction

    Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
  6. Stock Analysis

    2 Oil Stocks to Buy Right Now (PSX,TSO)

    Can these two oil stocks buck the trend?
  7. Investing News

    What Alcoa’s (AA) Breakup Means for Investors

    Alcoa plans to split into two companies. Is this a bullish catalyst for investors?
  8. Stock Analysis

    Top 3 Stocks for the Coming Holiday Season

    If you want to buck the bear market trend by going long on consumer stocks, these three might be your best bets.
  9. Investing News

    Could a Rate Hike Send Stocks Higher?

    A rate hike would certainly alter the investment scene, but would it be for the better or worse?
  10. Investing News

    Corporate Bonds or Stocks: Which is Better Now?

    With market volatility high, you may think it is time to run for corporate bonds instead of stocks. Before you do take a deeper look into which is better.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!