With the start of the new school year right around the corner–or already in progress for some–investors may be taking a closer look at those companies that might benefit from back-to-school shoppers. Whether it’s buying the latest trend in clothes and technologies, or the more timeless supplies like a new set of yellow No. 2 pencils and notepads, parents and children alike will be spending a significant amount of money as class gets back in session. Here is a look at a few ways to play this trend.
Students of all ages will be hitting the books now that summer vacation has ended, and textbook companies like McGraw-Hill (MHP), Thomson Reuters (TRI) and Pearson plc (PSO) are the largest players in this space. While these publishing companies have other divisions that focus in various industries, educational services and products are a main part of their operations.
Apparel retailers have been surprisingly resilient during this difficult period in the economy. Companies like Gap (GPS), American Eagle Outfitters (AEO) and Limited Brands (LTD) have seen stronger-than-expected growth over the recent quarter due to demand from consumers. Another interesting name could be apparel giant VF Corp. (VFC), which owns backpack makers Jansport and Eastpak.
Major retailers like Wal-Mart (WMT) and Target (TGT) are also obvious places to look. Parents can get their shopping done, checking off clothing items, supplies and other needs during just one visit. In addition to convenience, these larger national retailers also have the advantage of more attractive pricing to bring in customers. Of course, shoppers can also use online outlets like Amazon.com (AMZN) and eBay (EBAY) to get their supplies too.
For-Profit Higher Education
Though non-profit universities don’t trade on the public markets, these institutions do. The popularity of for-profit universities and technical trade schools have been growing in recent years, and companies like Career Education Corp. (CECO), Apollo Group, Inc. (APOL) and DeVry, Inc. (DV) are among the leaders.