Markets

These Retailers Can Best Weather Supply Chain Disruptions, Two Traders Say

Shoppers wearing masks search for items at a Costco Wholesale store
Robert Nickelsberg | Getty Images

Supply chain woes are plaguing many retailers, but a few stocks may be able to withstand the heat, two traders say.

Though Bank of America named Yeti Holdings and Dick's Sporting Goods its top fourth-quarter picks for their relatively low exposure to Vietnam's supply issues, a catch-all play like Costco may be the better bet, Laffer Tengler Investments' Nancy Tengler told CNBC's "Trading Nation" on Wednesday.

"This is a company that is well positioned to handle supply chain disruptions," the firm's chief investment officer said. "The purchasing team is probably one of the best in the industry."

Costco's management said on its latest earnings call that its warehouse format allows for stockpiling inventory and buying it when it's available, a promising advantage heading into the holidays, Tengler said.

It will also not only benefit from the rise of outdoor retail, like Yeti and Dick's Sporting Goods, but also holiday, toy and jewelry shopping, she said.

Athleticwear giant Nike could also be positioned for upside, Sanctuary Wealth's chief investment officer, Jeff Kilburg said in the same interview.

"I think you want to own it," he said, noting that the stock recently tested and held its 200-day moving average around the $145 level, meaning it has established support in that range.

Nike ended trading up nearly 2% at $156.30 on Wednesday.

"It's No. 1 in its space," said Kilburg, also founder and CEO of KKM Financial. Nike's market cap is north of $247 billion, while Dick's Sporting Goods' is around $10.7 billion and Yeti's is just shy of $7.5 billion, he added.

Though Nike's stock pulled back earlier this year in response to supply chain issues, its technical positioning and the negative sentiment surrounding Nike could spark a move to the upside, Kilburg said.

"I think this provides an opportunity for a little bit of outperformance," he said.

Disclosure: Tengler and Laffer Tengler Investments own shares of Costco.

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