It was a digital kind of Christmas.
Holiday sales surged more than 32% to a record high in 2020 from a year earlier, according to Adobe Analytics, with the pandemic accelerating a trend years in the making.
Investors are celebrating. The XRT retail ETF and e-commerce-focused IBUY ETF set record highs on Tuesday.
Mark Tepper, president of Strategic Wealth Partners, says it’s not just the biggest retailers in the space that should benefit. While he owns and applauds the e-commerce success of Walmart, Amazon and Target, he is also exposed to the trend through Ranpak, what he calls an “under-the-radar name.”
“It’s really a derivative play on e-commerce. it’s a small company, about a billion-dollar market cap and it’s very easy to understand what this company does. … They literally make the paper stuffing that goes inside your Amazon packages,” Tepper told CNBC’s “Trading Nation” on Tuesday.
Ranpak stock has risen 180% since March. It hit a record high on Friday.
“With Ranpak, you really don’t have to pick the winner. You don’t have to pick Lulu versus Nike or anything like that. As long as e-commerce continues to be a trend, a sustainable trend, which I believe it will be, Ranpak should benefit,” said Tepper.
A wide-ranging ETF could be the best bet for investors looking for exposure to the trend, according to Gina Sanchez, CEO of Chantico Global and chief market strategist of Lido Advisors.
“If you look at EBIZ, the ETF that is a broad e-commerce play, it’s not just about playing … the Amazons. If you look under the hood in the top 10 holdings, you’re playing names that are simply good at e-commerce,” Sanchez said during the same interview.
Sanchez highlights traditional e-commerce stocks such as Etsy, but also holdings such as travel site Booking and Williams-Sonoma, which has a physical and digital presence.
“You have a little more sort of cross-exposure to the retail … but also other forms of e-commerce that are not just the usual small packages, but things that come in the form of travel bookings and other industries that were also very hard hit by the pandemic. So an ETF like EBIZ will give you broader exposure to that recovery trade,” said Sanchez.
The EBIZ ETF hit a high on Tuesday. It has risen 5% since Jan. 1.
Disclosure: Strategic Wealth Partners holds TGT, AMZN, WMT and PACK.
