3 promising stocks in the overvalued e-commerce sector


The need for social distancing has become less of a driver for the e-commerce segment, which includes pureplays as well as traditional retailers with e-commerce capabilities. Indeed, as Commerce Department estimates indicate, some of the traffic that moved online in the early months of the pandemic is returning to stores.

As a result, e-commerce sales in the last quarter were 39.1% above 1Q20 (up 7.7% sequentially), with total retail sales increasing 16.8% ( up 7.8% sequentially). E-commerce accounted for about 13.6% of total retail sales in the United States, which is about the level of the previous two quarters, lower than the 15.7% share of the June 2020 quarter and higher to the 11.4% share of the quarter of the previous year.

Therefore, as the statistics above also show, e-commerce continues to grow strongly from an admittedly smaller base to take a larger slice of the total retail pie. And this is helped by the race to digitize, consumer habits changing for good and supply chains adjusting to help the two sides come together.

Additionally, while there may be some moderation in the absolute growth numbers this year, it is because of difficult lineups, and it is clear that e-commerce continues to increase its share in retail. total. Thus, growth is less negative for this group than valuation, which remains rich despite the sell-off in recent months. There are some names worth considering now: Overstock.com, Alibaba, and ASOS plc.

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Overstock.com, Inc. (OSTK): Free Stock Analysis Report

Alibaba Group Holding Limited (BABA): Free Stock Analysis Report

ASOS PLS ADR (ASOMY): Free Stock Analysis Report

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