As we head towards Black Friday, small cap specialty retail stocks United Online, Inc (NASDAQ: UNTD), TravelCenters of America LLC (NYSE: TA) and MarineMax, Inc (NYSE: HZO) have the distinction of being the best performing small cap specialty retail stocks for this year (according to Finviz.com) with gains of 181.2%, 123.8% and 71.8%, respectively. With those returns in mind, what are these small cap specialty retail stocks doing right and will the performance last through the all important holiday season? Here is what new and existing investors and traders alike need to know or consider:
United Online, Inc. A provider of consumer products and services over the Internet, United Online's Content & Media segment services are online nostalgia (Memory Lane) and online loyalty marketing (MyPoints) while its primary Communications segment services are Internet access and email (NetZero and Juno). The reason United Online is among the best performing specialty retail stocks for this year in various stock screening tools like Finviz.com is actually misleading as the company has just completed the spin off of subsidiary FTD Companies, a floral and gifts products company acquired in August 2008 for $441 million, as FTD Companies Inc (NASDAQ: FTD) where United Online shareholders received one share of FTD common stock for every five shares of United Online common stock they hold. In addition, United Online completed a one-for-seven reverse stock split of United Online shares. On Tuesday, small cap United Online, Inc fell 1.01% to $15.72 (UNTD has a 52 week trading range of $11.65 to $62.30 a share) for a market cap of $207.79 million plus the stock is up 181.2% since the start of the year and up 182.2% over the past five years. Meanwhile, the FTD Companies Inc now has a market cap of $611.60 and the stock is up almost 6% since October.
TravelCenters of America LLC. A leading travel center business in 42 states and Canada operating under the TA® and Petro Stopping Centers® brands, TravelCenters of America LLC has 248 full-service locations off interstate highway exits that offer diesel and gasoline fueling services, more than 500 full- and quick-service restaurants, 24-hour convenience stores, heavy truck maintenance services, RoadSquad Connect™ (24/7/365 emergency roadside service), Reserve-It™ (truck parking reservations) and many other services. Meaning if you are planning a road trip for Thanksgiving and other upcoming holidays, you might be stopping by one of their locations. About two weeks ago, TravelCenters of America LLC announced it had agreed to acquire 31 convenience stores with retail gasoline stations for $67 million with 28 of the locations being in Kentucky and 3 in Tennessee. In addition and earlier in the month, TravelCenters of America LLC jumped as much as 18% after a good earnings report where it reported a 1.4% revenue increase to $2.06 billion while net income decreased approximately 16.8% to $15.8 million mainly due to an increase in depreciation and amortization expense attributable to acquisitions and other capital investments (as in improvements to existing properties) plus related acquisition and financing costs. It was also noted that competitors had aggressively cut fuel prices to try and gain market share, but this tactic had abated somewhat in the third quarter verses the second. In addition, it was noted that an acquired travel center will reach stabilization in the third year of an acquisition, but this figure can vary widely between locations. On Tuesday, small cap TravelCenters of America LLC fell 0.85% to $10.52 (TA has a 52 week trading range of $4.18 to $12.50 a share) for a market cap of $311.07 million plus the stock is up 123.8% since the start of the year and up 709.2% over the past five years.
MarineMax, Inc. The nation's largest recreational boat and yacht retailer, MarineMax sells new and used recreational boats and related marine products and services as well as provides yacht brokerage and charter services at 54 retail locations around the country. I doubt many consumers will be buying a recreational boat or yacht for Black Friday or as a holiday stocking stuffer, but Bloomberg noted back in September that more Americans took to the water in new boats during the summer after buying smaller and less expensive models. In fact, purchases of powerboats (as in yachts, pontoons and fishing vessels) rose 18.9% in July from a year earlier while year-to-date sales were up 3.1%. Nevertheless, total expenditures on all new and used watercraft were still 23% below their 2007 peak according to the latest data available back in September. In addition and earlier this month, MarineMax reported a 9% fiscal fourth quarter revenue increase to $149.7 million while net income came in at $5.2 million or $490,000 excluding income from the Deepwater Horizon Settlement Program verses a net loss of $1.6 million. Fiscal 2013 revenue increased 11% to $584.5 million while net income was $15.0 million or $3.3 million excluding income from the Deepwater Horizon Settlement Program verses net income of $1.1 million for fiscal 2012. The CEO also noted that "despite the uncertainties in the macroeconomic environment and a weaker than expected first half of the fiscal year, we ended the year with greater assurance that the boating industry is recovering." On Tuesday, small cap MarineMax rose 2.4% to $15.36 (HZO has a 52 week trading range of $7.46 to $16.95 a share) for a market cap of $372.59 million plus the stock is up 71.8% since the start of the year and up 497.7% over the past five years.
Finally, here is a look at the long term performance of all three small cap specialty retail stocks:
As you can see from the above chart, its been a bumpy performance for investors since the end of the financial crisis but those investors or traders who got in or out at the right time would have still made some money from these small cap specialty retail stocks.
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