Cyber Monday's Winning & Losing Stocks: NILE, BBY, OSTK, WMT Under the Microscope

Although the crowds are still restless after flooding stores this morning to take advantage of all those great "Black Friday" deals, it's not too soon for investors to start thinking about tapping some names hot "Cyber Monday" names. Topping the list of candidates this year are Blue Nile, Inc. (NASDAQ:NILE) and Wal-Mart Stores, Inc. (NYSE:WMT), while names to avoid include Overstock.com, Inc. (NASDAQ:OSTK) and Best Buy Co., Inc. (NYSE:BBY).

Surprised by which names made which list? That's understandable. But, there's a rationale to the divvying.

First and foremost, while in-store holiday shopping (and Black Friday in particular) has been noticeably on the rise since 2008, online-shopping following Thanksgiving weekend has been rising considerably faster. In 2011, store sales grew 6.6% on Black Friday, while Cyber Monday sales were up 22% on a year-over-year basis. 2010's growth numbers were comparable. Point being, e-commerce is getting much more growth traction.

On the surface that would seem like automatic (relative) strikes against Best Buy Co. and Wal-Mart Stores, both of which still rely on traditional brick-and-mortar sales to fuel the bulk of their revenue. But, both WMT and BBY are both seeing more and more of their business come from online shoppers, and e-commerce may well be the difference-maker in how 2012's holiday results are received.

That plays into Wal-Mart's hands, and right out of Best Buy's.

Last year's fiasco BBY served up to online shoppers was pretty well documented, but if it doesn't ring a bell, here's the summary: Last year - just a few days before Christmas - Best Buy Co. canceled hundreds of online orders that shoppers were counting on receiving, citing a lack of inventory. Though the company has taken great strides to give its e-commerce business a much-needed overhaul, consumers are still leery of buying from Best Buy online, even if only concerned they're not getting the best deal possible.

Meanwhile, Wal-Mart Stores, Inc. has quietly become an even more potent online powerhouse. It was always a key player in the space, though mostly because of its offline size and clout. With the addition of a "pay with cash" feature as well as an in-store pickup and same-day delivery, WMT may finally be stealing some business back from Amazon.com. Not that the accolade makes it fully better than Amazon, but Wal-Mart has created a more enjoyable online-shopping experience than its biggest brick-and-mortar competitor Target. That can't be a coincidence, and more important, it may make a noticeable difference in Q4's results come Monday.

As for Overstock.com, though there's a light at the end of the tunnel - OSTK is finally turning the occasional quarterly profit - this pure e-commerce play has yet to become a threat to the likes of Amazon, Wal-Mart, or Target. And it this point, it may be time to start accepting the fact that it's never going to be able to; its competitors have too much of a head start. Cyber Monday is going to help this name the least.

The biggest beneficiary Cyber Monday in 2012 will likely be Blue Nile, Inc. - a name that's already shown huge traction growth with prior Cyber Monday's, and overall. The company expects to earn between $0.44 and $0.50 per share in Q4, versus last year's $0.30 per share in the fourth quarter of 2011.

To be fair, 2012 won't go down as a great one for NILE. Its year-over-year income was weaker in the first three quarters, despite a modest increase in revenue; Blue Nile appears to be doing less with more. However, the pessimism that has surrounded the stock as a result of a tepid 2012 may mean the stock's been set-up for a big earnings surprise (and surprise move) in the fourth quarter. The company may even telegraph a strong finish to the year by announcing Cyber Monday's stats. Just don't get married to Blue Nile, Inc... its strictly a seasonal idea for the time being (and following a weak 2011).