Buyers love specialty retail stocks. Their products are unique, exclusive, and often have a local appeal. In fact, the specialty retail sector has some of the highest levels of consumer loyalty among all retail sub-sectors. With so many specialty retailers to choose from, it can be tricky to know which stocks stand out from the rest. But investors who keep their eyes peeled for opportunities can profit handsomely by investing in these dynamic companies. In this article, we explore the best specialty retail stocks to buy in 2022 and beyond. To help you invest better and make an informed decision, we’ve listed our top picks with detailed pros and cons.
Best Specialty Retail Stocks to Buy in 2022
There are a few factors to consider when choosing the best stocks for 2022. We look at their current performance and potential for growth. We also consider the strength of the company’s balance sheet, management, earnings growth and valuation. Investors who buy stocks with a long-term investment horizon can weather the ups and downs of the market. When stocks are trading at a discount to their intrinsic value, it’s a smart time to buy.
Ulta Beauty Inc.
Ulta Beauty Inc. has been a leader in the specialty beauty and retail wellness sector for years. The company has been growing sales at an impressive rate, especially in the last five years. Ulta’s key strength lies in its ability to attract a wide range of customers. The company is known for its large selection of high-quality beauty products. Ulta offers a wide range of brands, including its own Ulta Beauty private label products. Ulta’s strong focus on customer service, coupled with its innovative Beauty Rewards loyalty program, has helped the company gain market share. Ulta is also a convenient one-stop shop for skincare, makeup, fragrance, hair care, and wellness products for both men and women. The company has been aggressively expanding its store footprint. Ulta has opened more than 1,000 new stores in the last three years. Ulta plans to open another 900 stores in 2019.
Pandora A/S
Pandora A/S is the world’s largest internet radio company. The company’s personalized internet radio services are available in more than 100 countries. Pandora is a great stock for long-term investors who want to invest in the future of streaming audio. The internet is a growing source of entertainment and advertising. Pandora’s ad-supported internet radio model is well suited to take advantage of this trend. Pandora plans to grow its user base and revenue by expanding its personalized internet radio service to new platforms. The company has been investing in research and development to expand its internet radio service to a wider range of devices. Pandora recently released its app on the Apple TV, Android TV, and Xbox One devices. Pandora also allows users to listen to its ad-supported radio service on Amazon’s Echo devices. The company also plans to launch its internet radio service on Google Home smart speakers later this year.
Amazon.com, Inc.
Amazon.com, Inc. has been a leader in e-commerce for more than two decades. As one of the top specialty retailers, Amazon is a must-have in any investment portfolio. The online retailer has all the makings of a long-term winner. The company has a strong balance sheet and a proven track record of earnings growth. Amazon has been investing aggressively to drive future growth. The retailer has been opening new fulfillment centers, expanding its grocery delivery service, and investing in video content. The company’s strength lies in its distributed and scalable business model. Amazon has built a platform that is robust enough to drive future growth and profitability. The company’s stock is trading at a healthy valuation, which is a positive for long-term investors. Investors who buy Amazon’s stock at its current price stand to make a healthy profit in the long run.
Foot Locker Inc.
Foot Locker Inc. is the world’s largest retailer of athletic footwear and apparel. The company’s strong brand and product assortment have helped it keep customers coming back for more. Foot Locker has a loyal customer base, which has helped it drive sales and earnings growth over the last few years. The company’s revenues have been growing at a robust rate, driven by its expanding store network. The retailer has been aggressively opening new stores to take advantage of the growth in the athleisure apparel and footwear market. Foot Locker has been expanding its store network in North America and Asia. The company has also been opening new stores in Latin America. The company’s stock is trading at a reasonable valuation. Investors who buy Foot Locker’s stock at its current price stand to make a healthy profit in the long run.
GameStop Corp.
GameStop Corporation is one of the world’s largest video game and consumer electronics retailers. The company operates a network of more than 8,000 stores in 35 countries. GameStop is a great specialty retail stock due to its high-margin business model and loyal customer base. The company’s core consumer base consists of core gamers who buy new and legacy video games. GameStop’s business model is high margin and has low capital intensity. The company’s core consumer base has remained loyal despite the growth in online gaming. This helps explain GameStop’s strong earnings growth in the last few years. GameStop is also investing in new technology to drive future growth. The company is building out a digital discovery and e-commerce platform. GameStop also plans to launch an online video streaming service to take on the growing digital gaming market.
Concluding Words: Wrapping up
Choosing the right stocks for 2022 requires research and patience. Investors need to find the best stocks for their portfolio and the market. Be sure to carefully consider each company’s potential for growth, business model, and competitive advantage. The best stocks are likely to be those that have the potential to deliver sustainable high-levels of earnings and revenue growth. These stocks should also have strong and healthy balance sheets, with low levels of debt. The best stocks for 2022 will be companies that have strong brands, healthy growth drivers, and a focused strategy for long-term profitability.