Analyst Serves Up Retail Stock Picks

Shop carefully! It's good advice not only for the consumer, but for the investor as well.

Piper Jaffray retail analyst Mitchell Kaiser told CNBC that investors should be especially selective about retail stocks these days.

He has three criteria for success: international exposure -- particularly in Canada and China; stores that allow consumers to consolidate shopping trips (and thereby save them money on gasoline); and retailers that have strong product trends.

Kaiser's stock selections cover a wide range, starting with Costco Wholesale. "Consolidating shopping trips, they're one that definitely benefits," he said. "They sell gasoline at a very reasonable price, so they're going to benefit."

When it comes to strong product trends, Kaiser chooses both a familiar name and one that's less well-known.

"I really like Best Buy a lot, and a smaller company that came public this year, H.H. Gregg," he said.

Gregg is "a higher-end TV and appliance retailer, and we think they could benefit from some of the higher-end trends."

In the rest of the retail pack, Kaiser doesn't see much promise. "Retailers that aren't in those hot product categories, I think they're going to have a difficult time this holiday season," he said.

© 2008 CNBC.com