The holiday season has been challenging. Overall spending is up, but not enough to cover the change in inflation over the past year. Consumer savings are down, and credit card spending is on the rise. That could push consumer spending lower. As a major part of the economy, that’s not good.
However, there’s a niche for retail spending that’s been growing tremendously in recent years. And a few companies behind that trend stand to benefit.
That trend is the rise of the resale market. Many are increasing their spending on secondhand gifts, using several companies to help make a market bringing together buyers and sellers.
One such player is Poshmark (POSH), which is focused on the gently used clothing market. Shares have performed about 10 percent better than the S&P 500, even in a slowing economy. And Poshmark grew revenues by 11 percent as more consumers have turned to spending on pre-owned goods.
Action to take: While not currently profitable, Poshmark has far more cash than debt on the balance sheet. And they don’t have to worry about inventories, as they’re bringing together buyers and sellers.
That could make them a surprising winner in an economy that continues to slow down, and makes shares worth buying for farsighted investors today.
For traders, the May $17.50 call, last going for about $0.70, offers mid-double-digit returns on a move higher in shares in the first half of the year. The trade is already slightly in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.