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Under Armour and 3 Other Growth Retail Stocks to Bank Upon

We always try to strike gold when it comes to selecting stocks. However, global economic headwinds, yet-to-recover Chinese economy, muted growth in the Euro zone and fluctuating commodity prices are leaving us perplexed about which stocks to bank on. The U.S. stock market also displayed a sluggish performance at the start of the year owing to fears of overseas turmoil and plunging oil prices. Although the market has recouped much of the losses, it is yet to breathe a sigh of relief.

But, every cloud has a silver lining, and Under Armour, Inc. UA may be a good bet in the given scenario. So don’t just sit on the fence.

Under Armour’s sustained focus on brand development, expansion of its direct-to-consumer business, product innovation and foray into the technology-based fitness business bode well, as it registered revenue growth of over 20% for the past 23 straight quarters. The company also appears compelling from the earnings perspective. In the trailing four quarters, Under Armour outperformed the Zacks Consensus Estimate by an average of 11.7%, including a positive surprise of 4.4% recorded in the last reported quarter (fourth-quarter 2015).

Under Armour is one such stock that well fits the portfolio of growth investors. This designer, marketer, and distributor of authentic athletic footwear, apparel, and accessories carries a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 24.3%, which appears far better than the industry average of 14.9%, thus clearly suggesting solid prospects. There’s more to feel good about this stock, which is expected to witness earnings growth of 24.7% in 2016 and 27.8% in 2017.

All these financial indicators are considered in the company’s Growth Style Score of “A” based on Zacks’ new Style Score System.

It is quite apparent that the market has witnessed a slew of events and to fetch higher returns amid such an investment climate is a difficult task. Well, now there are two choices in front of you; either be a mute spectator and wait for a convincing economic environment, or be a front-runner and winner by identifying stocks that have the potential to outperform even when market conditions are not congenial.

We have not restricted our article to just one stock. Instead we have identified three more stocks that look promising based on their favorable Zacks Rank – Zacks Rank #1 (Strong Buy) or #2 and encouraging Growth Style Score of “A”.

Other Prominent Choices

ULTA Salon, Cosmetics & Fragrance, Inc. ULTA, one of the leading beauty retailers, is a solid bet, with a Zacks Rank #1 and a Growth Score of “A”. The Bolingbrook, IL-based company delivered an average positive earnings surprise of 7.7% over the trailing four quarters, and has a long-term earnings growth rate of 19.5%. The company is expected to witness earnings growth of 19.7% in fiscal 2016 and 21.2% in fiscal 2017. The Zacks Consensus Estimate too has been trending up over the past 30 days.

We also suggest investing in Express Inc. EXPR, with a Zacks Rank #1, long-term earnings growth rate of 15% and a Growth Score of “A”. This Columbus, OH-based specialty apparel and accessories retailer delivered an average positive earnings surprise of 33.5% over the trailing four quarters. It is expected to witness earnings growth of 16.6% in fiscal 2016 and 7.8% in fiscal 2017. The Zacks Consensus Estimate too has been on the rise over the past 30 days.

Investors can also count on Sprouts Farmers Market, Inc. SFM, the retailer of fresh, natural, and organic food that carries a Zacks Rank #2 with a long-term earnings growth rate of 16%. This Phoenix, AZ-based company delivered an average positive earnings surprise of 3.9% over the trailing four quarters and has a Growth Score of “A”. The company is expected to witness earnings growth of 13.2% in 2016 and 19.8% in 2017. The Zacks Consensus Estimate too has trended upward over the past 60 days.

Bottom Line

Why should one wait for the market to gain momentum and then chalk out the investment strategy? Instead apply the growth mechanism and target those hidden gems that are fundamentally sound. The addition of these stocks will help you sail through unprecedented market challenges. You can use the Zacks Stock Screener to find other stocks with a solid Zacks Rank and a Growth Score of “A” or “B”.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&... blog">Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
EXPRESS INC (EXPR): Free Stock Analysis Report
 
ULTA SALON COSM (ULTA): Free Stock Analysis Report
 
UNDER ARMOUR-A (UA): Free Stock Analysis Report
 
SPROUTS FMR MKT (SFM): Free Stock Analysis Report
 
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