Analyst: Sentiment On Retail Is So Poor It's An Opportunity For Investors

According to some analysts, retail stocks have been so hard hit as of late that investors who pick a strong standout in the group could be rewarded.

One of those analysts is Susquehanna's Stacey Gilbert, who explained during a recent CNBC "Trading Nation" segment that the volatility within the retail sector as a whole will experience more volatility than nearly any other sector.

But that shouldn't deter investors.

"We are starting to see investors pick name that they like, that they think is oversold," Gilbert explained. "We like that strategy."

Gilbert said one of the names investors are buying is Foot Locker, Inc. FL following a massive 17 percent selloff in response to its earnings report. She believes this move was unwarranted since Foot Locker isn't showing any traffic problems.

To hedge the position, Gilbert is recommending owning the July $60 calls for the embedded protection.

"This is the best way to play retail," she emphasized. "Find the names you like, don't buy the basket because all the names have different issues. Find the names you like and position that way."

Matt Maley of Miller Tabak was also a guest and agreed there are selective opportunities for investors in the retail space, but only on a short-term basis. He believes that over the longer term, the group as a whole has a "lot of trouble."

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Image credit: Emily Elconin