Black Friday gets all the hype. But Cyber Monday is the fastest-growing U.S. shopping day. And companies that are online-centric benefit most.
Today is Black Friday.
For many of you, that means braving long lines at Best Buy or Wal-Mart to get an early start on your holiday shopping at a significant discount.
For retailers, Black Friday is their Super Bowl. Americans spent $57.4 billion on Black Friday weekend last year, accounting for more than 45% of total holiday shopping sales in 2013.
These days, however, the Black Friday spending spree doesn’t end on Sunday. Thanks to Cyber Monday, it spills over into the following work week.
As the online version of Black Friday, Cyber Monday gives consumers who prefer to do their shopping online a chance to do so at once-a-year discounts from the comfort of their own homes. Unlike Black Friday sales, Cyber Monday sales are actually on the rise.
The $57.4 billion Americans spent last Black Friday weekend (technically Thanksgiving Day through Sunday) actually marked a 2.9% decline from the previous year. It was the first Black Friday sales decline since 2009.
Cyber Monday sales, on the other hand, surged 16% to a record $2.29 billion.
That doesn’t mean holiday shoppers are shunning brick-and-mortar stores for the convenience of online shopping. After all, Americans spent $55.1 billion more over the Black Friday weekend than they did on Cyber Monday. Still, Cyber Monday sales are surging while Black Friday sales are declining.
The companies able to take advantage of the slow shift to Cyber Monday should benefit – not just this year, but for many years to come.
Here are three web-centric stocks that should get a nice short-term bump from what is likely to be another record Cyber Monday.
Amazon.com (NASDAQ: AMZN)
Amazon is the dominant Internet shopping presence. So it’s no surprise that it’s also the dominant Cyber Monday beneficiary.
The world’s largest Internet retailer saw a 46% improvement in sales on Cyber Monday last year, luring customers with deals of half off Mattel and Fisher-Price products and 65% off men’s and women’s cashmere.
Amazon shares rose 1.7% in the month that followed Cyber Monday. More importantly, the big shopping day propelled the company to its highest sales ever in the fourth quarter. It also led to a 150% year-over-year improvement in earnings per share.
Those stellar earnings results pushed Amazon above $400 a share for the first time ever in late January.
eBay (NASDAQ: EBAY)
The largest online community for buying and selling things saw a 30% boost in sales on Cyber Monday last year.
Because items such as video games and toys sold out in brick-and-mortar stores on Black Friday, consumers turned to eBay to bid on re-sales. As with Amazon, that helped eBay to its best quarterly sales ever. Meanwhile, eBay shares rose 6.8% in the month following Cyber Monday.
Expect another big day from eBay this year.
Groupon (NASDAQ: GRPN)
Groupon is not a profitable company. But it has set sales records each of the last two Cyber Mondays.
The leader in online discounts – Groupon is a play on the word “coupon” – Groupon had its best day yet last Cyber Monday. Billings were up almost 30% from the year before.
Though the company still failed to turn a profit in the fourth quarter of 2013, the record sales helped turn around a floundering stock – at least for a month or two. On Cyber Monday, GRPN shares closed at $8.75. By Jan. 2, the stock was up to $11.85 – a nice 35% bump.
I wouldn’t recommend Groupon as a long-term hold . . . not until the company proves it can consistently turn a profit, at least.
However, if you’re looking to turn a quick profit over the holidays and have the stomach for a short-term trade, chances are Groupon will get a similar bump this year. At $7.54, the stock is actually trading even lower than it did a year ago.
Plus, few online companies offer deeper Cyber Monday discounts than Groupon. Last year, it slashed prices on things like restaurant gift cards, spa packages and Android tablets by as much as 90%.
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