In today’s Expert Spotlight piece, we will talk about a Wall Street analyst, Scot Ciccarelli, and two of his top picks in the retail sector.
Ciccarelli is the Managing Director and a Senior Equity Research Analyst at Truist Securities. He has been in the market for more than three decades. Based out of Chatham, NJ, Ciccarelli has worked at RBC Capital Markets for almost 20 years and BMO Capital Markets for 12 years. Ciccarelli is a CFA Charterholder. He also holds a Bachelor of Science degree in Accounting and Finance from Susquehanna University.
There is no denying the fact that rising interest rates and record-high inflation levels have hurt market sentiments worldwide. Investors today are faced with the daunting task of finding the right stocks to shield their investments.
In such a situation, following market veterans can prove to be a prudent choice. This is because these market experts have the expertise to tide through market uncertainties, pocketing better returns than an average investor.
Keeping this in mind, the TipRanks’ Expert Center brings you the top minds from Wall Street and their best stock picks, which can be considered by investors in their endeavor to bag better returns.
Performance & Track Record
According to the TipRanks Star Ranking System, Scott Ciccarelli is ranked 10th out of 7,906 analysts in the TipRanks universe. Further, he enjoys the 20th position among 20,500 experts, including hedge fund managers, Wall Street analysts, corporate insiders, financial bloggers, and individual investors, on TipRanks.
Ciccarelli has a success rate of 72% and an average return per rating of 20.9%.
The analyst’s average returns relative to the S&P 500 and the benchmark sector stand at 6% and 7%, respectively.
According to TipRanks, Ciccarelli’s most profitable pick has been Five Below Inc. (FIVE), between March 18, 2020, and March 18, 2021, generating an impressive return of 249.4%. Further, the stock continues to remain one of his top picks.
Now, let’s have a look at two of his top picks.
Ollie’s Bargain Outlet (NASDAQ: OLLI)
Based out of Harrisburg, the capital city of the state of Pennsylvania, Ollie’s Bargain Outlet is a retail chain of discount stores, operating since 1982. The company currently operates 448 stores in 29 U.S. states.
Presently, the company commands a market cap of $3.83 billion.
The retailer’s recent results remained muted, with both revenue and earnings witnessing a year-over-year decline. While net sales dropped 10.1% year-over-year to $406.7 million, earnings plummeted 75% from the year-ago period.
The company is slated to report its second-quarter results on August 25, with earnings per share (EPS) anticipated at $0.33.
Ciccarelli maintains a Hold rating on the stock. The analyst cherishes a success rate of 74% and an average profit of 35.6% on the stock.
According to the analyst, although the company’s recent results were disappointing, its growth potential remains strong amidst an improvement in the overall operating environment.
Overall, the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on seven Buys, four Holds and one Sell. OLLI’s average price target of $62.50 implies that the stock has upside potential of 1.9% from current levels.
Five Below Inc. (NASDAQ: FIVE)
Five Below is a discount retail chain, which sells all its products for less than $5. The chain operates 1,225 stores across 40 states in the U.S. Presently, the company commands a market cap of $6.27 billion.
Five Below’s latest results for the first quarter were mixed, with revenues rising but earnings declining from the year-ago period. The company’s net sales for the quarter increased 7% to $639.6 million. However, EPS declined 33% from the previous year to $0.59.
The company is slated to report its second-quarter results on August 31. It anticipates earnings of $0.81 per share.
Ciccarelli remains bullish on the stock. The analyst has a success rate of 68% and an average profit of 40.4% on the stock.
According to the analyst, the company’s overall strong results for the first quarter were impressive. Although the company lowered its guidance for 2022, due to inflationary pressures, growth is expected to come back in the fourth quarter.
Overall, the Street has a Strong Buy consensus rating on the stock based on 16 Buys and four Holds. FIVE’s average price forecast of $171.21 implies upside potential of 51.5% from current levels.
Conclusion
The retail industry is impacted by muted demand amid an inflationary environment and the impending recession. Investors interested in this space may want to follow Scott Ciccarelli on TipRanks and consider investing in the stocks that make his portfolio so attractive in these uncertain times.
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