Here at The Motley Fool, we prefer to invest in companies, not just trade stocks, and think about where a business might be headed five or 10 years down the road as opposed to how the next analyst upgrade or downgrade might affect a stock. However, that doesn’t stop us from looking at smaller trends that can ultimately have a big impact on a company’s future growth prospects.
Source: D. Sharon Pruitt, Flickr.
In August of last year, $8.5 billion was spent at family clothing stores while an additional $2 billion was spent at bookstores, according to data from the U.S. Census. Marking the slow wind-down of the vacation season and the rush to get clothes, supplies, and gadgets needed for the upcoming school year, August and September, better known as the back-to-school shopping season, represents one of the many times of the year that retailers absolutely covet. That’s why today I want to take a closer look at five companies that could benefit in a big way this back-to-school shopping season.
A portfolio “staple”
Some of the more obvious winners during the back-to-school season are companies that provide stationery supplies. Although you can pretty much pick up anything from paper and binders to pencils and pens at your local grocery store, I think office-supply chain Staples, Inc. (NASDAQ:SPLS) might be a big destination of choice for back-to-school shoppers. Staples, Inc. (NASDAQ:SPLS) is in the perfect position to pick up back-to-school traffic with its main rivals OfficeMax and Office Depot merging. Their combination will result in store closures and displaced customers who could very easily find their way into Staples’ stores. With a renewed focus on direct-to-consumer sales as well, look for Staples, Inc. (NASDAQ:SPLS) to be a pleasant surprise for investors.
Another obvious stop for back-to-school shoppers is the clothing store to pick up the latest fashions for the upcoming school year. Here I believe The TJX Companies, Inc. (NYSE:TJX), the company behind T.J. Maxx, Marshalls, and HomeGoods, stands to be a big winner. With U.S. consumer spending in just OK shape and taxes for most Americans higher than where they were at this time last year, consumers are likely to shy away from the traditional mall stores and opt instead for brand-name merchandise at discount prices … or, in other words, precisely what The TJX Companies, Inc. (NYSE:TJX) specializes in. Even though the company’s first-quarter comparable-store sales increase of 2% might appear tame, that figure compares with record results in the previous year. The TJX Companies, Inc. (NYSE:TJX) has the right product and the management team to continue to succeed.
Source: Sean MacEntee, Flickr.
A healthy diet of “fruit”
Don’t overlook the allure of technology during this back-to-school season, either. In addition to smartphones becoming a practical necessity for today’s youth, tablets have become an integral learning tool for children from preschool through college. This is why I think investors should be considering Apple Inc. (NASDAQ:AAPL), which still dominates the tablet market with market share of 32% and sold a whopping 31.2 million iPhones just last quarter. Apple Inc. (NASDAQ:AAPL) may have been slapped with the “boring” label in recent months, but this is the same innovative and cash-rich company we’ve watched transform our world over the last decade.