Corinna Freedman, equity research vice president at Wedbush Securities, was on Fox Business to shed some light on retail stocks that investors can positively bet on and those that should be avoided. Some of the stocks that rank as Freedman’s top picks include Under Armour Inc (NYSE:UA), Deckers Outdoor Corp (NYSE:DECK) and VF Corp (NYSE:VFC).
On Wall Street, Freedman is an analyst of repute. She is listed as the No. 1 clothing and accessories analyst on Wall Street Journal’s Best on the Street. Her area of coverage consists of mostly clothing and footwear manufacturers. “Not so much the retailers in my sector,” she said in the interview.
There is no doubt that retailers have been underperforming, and investors should carefully select what to own in the retail sector. Most retailers blamed the harsh winter weather for the poor performance in 1Q, but now the story has to change as the second round of reporting kicks in for the retail sector. Concerning brands, Freedman said that not a big shift has been noticed on the sector she covers. “We are covering the brands, and the brands that were outperforming last year continue to outperform this year,” she said.
In picking the best stocks in her sector, she said they put a lot of emphasis on expanding market share and also categories that are outperforming, especially the athletics. On that note, Freedman expects manufacturers with seasonal components to witness an uptick.
In the interview, Freedman tried to bring out the strengths in Deckers Outdoor Corp (NYSE:DECK) and VF Corp (NYSE:VFC), but mostly dealt with Under Armour Inc (NYSE:UA).
“We love Under Armour for its international growth opportunity,” she said of the $12.4 billion company that deals with footwear and accessories for men, women and youth.
She went on to say that Under Armour Inc (NYSE:UA) is witnessing a lot of traction in the footwear category, which is a fairly new category for the business, since their reentry a couple of year ago.
Freedman believes that athletic for wear is a huge chance for Under Armour Inc (NYSE:UA). As for the stocks to avoid in the clothing and footwear sector, Freedman singled apparel retailers.
“Apparel retailers are going to be under more pressure for back to schools so we will probably avoid that group,” she advised.