While the overall market hovers near an all-time high, retail stocks lagged. Take the SPDR S&P Retail ETF (NYSEARCA: XRT ), for instance, the largest ETF in the space, which has yet to reclaim its 2021 highs. In fact, several major retail stocks have seen further dips recently.
This divergence from the overall market likely presents a unique opportunity for investors looking for exposure to quality retail stocks. While Wall Street continues to overlook most retail names, many provide exceptional value and offer a wide margin of safety compared to the inflated valuations in today’s market. For this article, I have selected three retail stocks that have experienced recent dips, even though their investment cases hold strong.
These stocks offer an attractive entry point on a standalone basis and promise solid returns as the retail industry gradually rebounds. By gaining exposure to these undervalued names, investors can enjoy strong upside potential and mitigate the risks associated with higher valuations elsewhere. CVS Health Corporation (CVS) The first retail stock to consider today is CVS Health Corporation (NYSE: CVS ).
The diversified healthcare giant operates retail pharmacies, a pharmacy benefits manager, and health insurance services through Aetna . Despite its attractive, recession-proof business model, CVS stock has faced a challenging year. Shares are down 23.
2% over the past year, significantly underperforming the overall market. However, there’s more to the stor.