The rising popularity of online stock trading is proof of the advancements in the trading software. But while the software gives you a clear view of the markets, the opinion of experienced analysts still helps in seeing what the future holds for certain stocks and how to invest accordingly.

Think Holiday Season, Think Retail Stocks

It just takes the holiday season to blanket the gloom that had taken over the markets as a result of a forgettable October. Now that Thanksgiving has passed by and the holiday season is soon upon us, investors would be focusing on stocks for the holidays. Many retailers have posted third quarter profits that were higher than expected. But Amazon's ($AMZN) rise is still the dominating story of retail, reckons seasoned analyst Martin Tillier. And that's disruptive for conventional retail.

Stocks Connected to the Retail Industry

But Tillier reckons that there is a way to deal with this uncertainty by focusing on stocks that can benefit with the rise of both online and conventional retail - card stocks. Tillier reasons that since cards are the preferred mode of payment at online stores or brick-and-mortar ones, they will be getting a boost no matter what the direction of the consumer trend is. As you know, the major card companies are Mastercard ($MA) and Visa ($V). These stocks did fall during the great October sell-off. Despite that, they aren't exactly cheap. The trailing P/E of Visa is somewhere around 30. Mastercard's P/E is somewhere nearing 38. Despite these high figures, the point of attraction is their rate of growth. Both the stocks have experienced quarterly earnings' year-on-year growth of nearly 33%. Despite that growth though, with the market being brought lower as a result of fears centering on the potential of future growth, both these card stocks have suffered a harder impact since a significant portion of their value is derived from growth expectations.

Because of that, the chart above furnished by Tillier reveals that $V and $MA have experienced 10% and 15% declines respectively. This decline has been happening since October beginning. That is also the time when the S&P 500 experienced a 9% loss.

Consumers Are Willing to Spend This Festive Season

But the shopping season should fuel growth and though we leave a gloomy market behind, there is plenty of reason to suggest that consumers won't be hesitating to spend. Let's face it, consumers aren't like investors or stock traders. They act on the basis of their present situation, not on what they think the market will be heading towards in the future.

And consumers' present situation isn't bad at all. Unemployment rates are low and the wages are significantly rising in the US. This pattern is also seen globally, as can be inferred from the CCI (Consumer Confidence Index)of the OECD which stays above 100. Such levels have not been witnessed since early 2007. And the underperformance that has been witnessed so far from these retail-connected stocks also indicates that any scenario of consumers tightening their expenditure is also priced in.

All these factors look likely to make it an encouraging fourth quarter for retail and retail-connected stocks, particularly these two card stocks.

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