Black Friday and Cyber Monday have come and gone. It’s likely that the biggest bargains in retail for the holiday season have already been made. Sales appear to be higher, but adjusted for inflation, overall volumes may be lower.
One way traders can wade through the opportunities in retail in the coming weeks is to look for companies that didn’t have excess inventory to clear, or needed to resort to massive discounts this holiday season.
One potential winner is already emerging:
Decker Outdoors Corporation (DECK).
The maker of footwear is best known for its UGG brand boots, and the company didn’t see fit to lower prices significantly at its retail locations. That’s a sign that the company is confident in its products, and that it doesn’t need to compete on price and have big deals during the holiday season.
In the meantime, shares are down about 8 percent in the past year, slightly outperforming the S&P 500. With shares going for about 22 times forward earnings, a strong holiday season could lead to a move higher in the shares in the coming months.
Action to take: Investors may consider accumulating shares here. The stock has been trending gradually higher since May, and has some strong momentum behind it.
For traders, the February $440 calls, last going for about $19.00, offer mid-double-digit returns from here. Traders should look to take quick profits on the stock, rather than hold until expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
