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4 Stocks to Make the Most of This Cyber Monday

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After Black Friday’s mind-boggling shopping deals, Cyber Monday has a number of tempting alternatives. Bargain hunters are poised to take over the Internet on Dec 2 in search of the best deals. In fact, this Cyber Monday is touted to become the biggest U.S. e-commerce sales day in history!

Banking on such Cyber Monday rush, let’s take a look at the top retailers poised to gain significantly in the near term.

Cyber Monday Likely to be the Biggest Ever

Cyber Monday, the online equivalent of Black Friday, is expected to be the largest online shopping fiesta of all times, according to Adobe Digital Insights (ADI). Online sales volumes are expected at around $9.4 billion, up 18.9% from year-ago level.

In fact, this year’s holiday season is likely to witness bumper online sales. According to the National Retail Federation and Prosper Insights & Analytics (NRF), online sales growth during this year’s holiday season is expected between 11% and 14% to reach a total of $162.6-$166.9 billion, suggesting a rise from $146.5 billion reported during the same period last year.

Last but not the least, Deloitte forecasts a 14-18% rise in e-commerce sales during the holiday season on a year-over-year basis. Notably, most of the purchases are widely expected to be made via mobile devices, according to market-watcher App Annie.

Black Friday Saw Record Online Sales

Most customers logged onto the Internet for deals on Black Friday. Per Adobe Analytics, Black Friday recorded the second-largest online sales day ever, slightly short of last year’s Cyber Monday’s $7.4 billion. The sales figure also showed a rise of 9.6% from last year, per Adobe.

Meanwhile, online sales totaled $4.2 billion during the Thanksgiving Day, up 14.5% from a year ago. Adobe added that bigger online sellers witnessed better sales than their smaller counterparts. Needless to say, online sales keep touching record highs as customers for years have been shopping on mobile phones and laptops instead of at brick-and-mortar stores.

What’s the Online Rush About?

Consumers are looking at convenience factors more than ever this year. Lower-priced goods, free shipping and product availability are the primary reasons as to why consumers are more likely to opt for shopping online during this holiday season.  Best of all, customers can place orders from the comfort of their homes or at work.

By the way, with the economy growing at a healthy rate and the labor market remaining strong, consumers are willing to spend more this Cyber Monday and beyond. The pace of U.S. economic expansion picked up in the third quarter. Per the Bureau of Economic Analysis, the economy grew at an annualized rate of 2.1% in the three months ended Sep 30, more than the initial estimate of 1.9% and the 2% pace in the second quarter. The unemployment rate, by the way, is near the lowest level in 50 years while average hourly earnings improved 0.1% last month to a year-over-year 3% gain, also in line with estimates.

4 Stocks to Gain From the Online Rush

The latest trends bode well for Amazon.com, Inc. (AMZN - Free Report) as being the biggest online seller, the company garners 38% of all online spending in the United States, per eMarketer. In fact, Amazon’s share of online holiday sales has increased at a steady clip for quite some time now, thanks to the amazing deals it offers.

The company is currently benefitting from solid Prime momentum owing to robust grocery services and strong content portfolio. Moreover, the Prime Free One Day service helped Amazon gain traction across customers. Further, strengthening AWS services and its growing adoption rate contributed to the latest quarterly results. By the way, the company’s expected earnings growth rate for the next year is 29.4% compared with the  Internet - Commerce industry’s estimated rise of 16.3%.

Walmart Inc. (WMT - Free Report) , in the meantime, is fighting back with an aggressive e-commerce push, while traditional retailers like Target Corporation (TGT - Free Report) are positioned to gain as it has invested heavily in digital operations and has made its website a viable competitor to established online players.

Walmart’s expected earnings growth for the current year is 1.2%, in contrast to the Retail - Supermarkets industry’s projected decline of 7.7%. Similarly, Target’s earnings growth is expected at 18.4% versus the Retail - Discount Stores industry’s projected increase of 9.2%.

With this year’s Cyber Monday poised to be a record setter, investing in Groupon, Inc. (GRPN - Free Report) seems to be a good move. After all, Groupon operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount in North America.

Groupon’s expected earnings growth for the current year is 33.3%, way more than the Internet – Commerce industry’s projected rise of 3%.

While Amazon and Walmart currently possess a Zacks Rank #3 (Hold), Target and Groupon flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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