The Zacks Analyst Blog Highlights: Amazon, Wal-Mart,SPDR S&P Retail ETF, Market Vectors Retail ETF and PowerShares Retail Fund

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Dec 01, 2014, 09:30 ET

CHICAGO, Dec. 1, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Amazon (Nasdaq:AMZN-Free Report), Wal-Mart (NYSE:WMT-Free Report), SPDR S&P Retail ETF (AMEX:XRT- Free Report), Market Vectors Retail ETF (AMEX:RTH- Free Report) and PowerShares Retail Fund (AMEX:PMR- Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday's Analyst Blog:

3 Retail ETFs Headed into the Black

Now that the Thanksgiving feast is done, the turkey is eaten, it's time for the biggest shopping day of the year. U.S. shoppers are swarming to the stores by the millions to save on their Christmas shopping. And how the retailers are ready to lure the willing buyers with deep discounts and attractive offers.

Black Friday in other words is the greatest paean to American consumerism. And things couldn't get any better this year around what with an improving economy, an accelerating job market and a slow but certain recovery in housing. Add to this an unbelievable drop in gasoline prices, all leading to fatter wallets and more spending power.

The National Retail Federation believes that Black Friday will likely be a huge success this year with more than two-thirds, counting 95.5 million, shoppers expected to hit the stores to grab the best deals in electronics and clothes. The expectation is much higher than the 92.1 million people who actually shopped this day last year. Though e-commerce or online has been the major source of sales in recent times, queuing up and camping out for Black Friday has become as much of an American tradition as the feast itself.

Yet, Thanksgiving weekend sales (comprising four days of frenetic sales) are expected to be a little damper than last year. Roughly 140.1 million people are estimated to shop this weekend as compared to 140.3 million in the same period last year, suggesting that fewer shoppers would take advantage of the Thanksgiving weekend deals (read: Give Special Thanks to These 3 ETFs).

Don't Blink and Miss These Black Friday Deals

A number of retailers have perked up their exciting offers to lure customers for Black Friday and the Thanksgiving weekend. As the shenanigans are on we have highlighted some of the best deals from the major retailers below.

Amazon (Nasdaq:AMZN-Free Report) has kicked off its Black Friday online deals earlier this year. The online e-commerce behemoth has been rolling out new deals as often as every ten minutes for eight days starting from November 21 on everything from electronics to clothing to toys. In addition, it has six special "Deals of the Day," three each on Thanksgiving Day and Black Friday.

Wal-Mart (NYSE:WMT-Free Report), the world's largest retailer, started the Black Friday sales at 6 p.m. on Thanksgiving Day with a special '1-hour guarantee' in which customers in designated lines have a chance to purchase specific items at very low prices. Further, the company is offering electronic products at cheap prices such as a 50" LED HGTV for $218, iPad mini 16GB with Wi-Fi for $199 (with a bonus $30 Walmart gift card), LG Blue-ray player for $35, HP Intel laptop for $249, 2 Gold Edition Bundle for $149.96 and Xbox One Assassin's Creed Unity Bundle for $329 (read: Wal-Mart U.S. Revenue Gain Pushes Stock and ETFs Higher).

ETFs to Play

All of these attractive offers are bound to boost retail sales, keep investors happy and lead to a surge in stock prices in the months to follow. While an individual stock is certainly a great option to tap the Black Friday and Thanksgiving weekend deals in the investment world, a basket approach through ETFs is diversified and more cost effective at lower risk. Below, we have highlighted three retail ETFs that investors should watch this weekend.

SPDR S&P Retail ETF (AMEX:XRT-Free Report)

This product tracks the S&P Retail Select Industry Index, holding 103 securities in its basket. It is widely spread across each component as none of these holds more than 1.22% of total assets. Small cap stocks dominate more than half of the portfolio while the rest have been split between the other two market cap levels.

In terms of sector holdings, apparel retail takes the top spot at one-fourth share while specialty stores, automotive retail, and Internet retail also have double-digit allocations. The fund has amassed over $1.1 billion in its asset base and trades in heavy volume of nearly 2.1 million shares per day. The ETF charges 35 bps in annual fees and has added over 6.7% in the year-to-date timeframe. The fund has a Zacks ETF Rank of 2 or 'Buy' rating with a Medium risk outlook (read: Retail ETFs Gain Ahead of Holiday Season on Decent Earnings).

Market Vectors Retail ETF (AMEX:RTH-Free Report)

This fund follows the Market Vectors US Listed Retail 25 Index and holds about 26 stocks in its basket with AUM of $118.6 million. Average daily volume is light at under 31,000 shares while the expense ratio is at 0.35%. The product is a large cap centric fund and is heavily concentrated in the top 10 holdings with 63.6% of assets -- the largest allocations going to WMT, Amazon and Home Depot.

Sector wise, specialty retail occupies the top position with less than one-third share, followed by double-digit allocation to hypermarkets, departmental stores, drug stores, and health care services. RTH surged 13.6% so far this year and has a Zacks ETF Rank of 3 or 'Hold' rating with a Medium risk outlook.

PowerShares Retail Fund (AMEX:PMR-Free Report)

This retail fund provides a diversified exposure across various market caps with 41% in large caps, 39% in small caps, and the rest in mid caps. This is easily done by tracking the Dynamic Retail Intellidex Index. The fund has accumulated just $20.2 million in its asset base while it trades in light volume of under 10,000 share a day. The ETF charges 63 bps in fees per year (read: A Comprehensive Guide to Retail ETFs).

In total, the product holds 30 securities with moderate concentration of 46.8% across the top 10 holdings. In terms of industrial exposure, specialty retail takes the top spot at 36%, while food retail (19%) and hypermarkets (13%) round off the top three positions. PMR has gained about 6.3% this year and has a Zacks ETF Rank of 3 with a Medium risk outlook.

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