4 Stocks to Consider as Students Return to School

As the Tokyo Olympics draw to a close and children begin returning to school following the summer season, four stocks with high profitability and could benefit from back-to-school shopping trends include Walmart Inc. (

WMT, Financial), Target Corp. (TGT, Financial), Big Lots Inc. (BIG, Financial) and Newell Brands Inc. (NWL, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.

Coronavirus trends worsen as students start shopping for the return to school

According to CNBC, major U.K.-based consulting company Deloitte has estimated that back-to-school spending for students in grades K-12 this year would increase by approximately 16% from last year and approximately 17% from 2019. Despite the strong shopping trends, new surges in coronavirus cases and other related shipping and industry constraints may slow momentum in back-to-school spending.

On Sunday, the U.S. reported a seven-day average of 108,600 new Covid-19 cases, up 36% from a week prior according to Johns Hopkins University statistics.

Despite the concerns regarding the possible slowdown in back-to-school spending, investors can still find opportunities in companies specializing in back-to-school retail products. GuruFocus’ All-in-One Screener listed four such stocks with a profitability rank of at least 7.

Walmart

Walmart (

WMT, Financial) sells a wide range of general merchandise, grocery and clothing items. GuruFocus ranks the Bentonville, Arkansas-based company’s profitability 7 out of 10 on the back of profit margins and returns outperforming more than 68% of global competitors.

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Gurus with large holdings in Walmart include


Ken Fisher
(Trades, Portfolio)’s Fisher Investments,
Bill Gates
(Trades, Portfolio)’ foundation trust and
Ray Dalio
(Trades, Portfolio)’s Bridgewater Associates.

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Target

Target (

TGT, Financial) operates a network of stores that retail beauty and household products, groceries, clothing and apparel and other essential office products. GuruFocus ranks the Minneapolis-based company’s profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank, a high Piotroski F-score of 9 and profit margins and returns that outperform more than 88% of global competitors.

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Gurus with large holdings in Target include


Jim Simons
(Trades, Portfolio)’ Renaissance Technologies,
Spiros Segalas
(Trades, Portfolio) and
Pioneer Investments
(Trades, Portfolio).

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Big Lots

Big Lots (

BIG, Financial) operates a network of discount retail stores that offer grocery, home and office products. GuruFocus ranks the Columbus-based company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and profit margins and returns that outperform more than 81% of global competitors.

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Newell Brands

Newell Brands (

NWL, Financial) produces a wide range of school supply products through brands like Paper Mate, Sharpie, EXPO and Rubbermaid. GuruFocus ranks the Atlanta-based company’s profitability 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and profit margins and returns that outperform more than 70% of global competitors.

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