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Key Topics Covered in the Video:
- Consumer staples dominated by the giants $WOW and $COL
- Sector is heavily tied to the economy
- Discretionary stocks to watch
Retail stocks on the ASX
Consumer staples and consumer discretionary
Rich talks retail stocks
Consumer staples & consumer discretionary. What are our favourite stocks?
Retail stocks on the ASX – what we watch
Make money through the cycle: These stocks are heavily tied to the economy and are typically cyclical
Harvey Norman (ASX: HVN)
A major retailer and franchise business, property development and digital systems. It is a franchisor selling furniture, bedding computers electricals and provides consumer finance.
JB Hi-Fi (ASX:JBH)
A top retailer for consumer electronics, software games, whitegoods and appliances.
Woolworths (ASX: WOW)
Major consumer defensive. It’s one of the largest retail operators in Australia and New Zealand, with 3,357 stores and approximately over 190000 employees. It includes supermarkets + Big W.
Read the full research on our favourite retail stocks
The retail sector is highly cyclical but investors can make a lot of money through the cycle. These are not set and forget shares.
Richard Hemming
Editor
Australian Consumer stocks
Stock picking the best shares in each sector. Discover the best consumer driven retail stocks
There are 77 consumer staples companies in food and beverage, household and personal products and distribution and retail. This is dominated by the big supermarkets and beverage companies.
There are 117 consumer discretionary companies in industries including cars and car parts, consumer durables and apparel, services, and distribution.
Uncover more ASX Sectors to invest in today.
FAQs
| Code | Company | Market Cap | ||||
|---|---|---|---|---|---|---|
| 1. | ASX:WOW | Woolworths Group Limited | 36.12B | |||
| 2. | ASX:COL | Coles Group Limited | 23.79B | |||
| 3. | ASX:TWE | Treasury Wine Estates Limited | 8.84B | |||
| 4. | ASX:EDV | Endeavour Group Limited | 7.77B | |||
| 5. | ASX:A2M | The A2 Milk Company Limited | 3.49B | |||
Read our Buy, Sell, Hold Radar Ratings! We buy on a combination of quality and value. Generally there will not be many retailers that can keep growing because the market is very small in Australia. Hence value is a very important criteria, which is not easy to work out in such a concentrated and cyclical industry.
| 1. | ASX:WES | Wesfarmers Limited | 78.58B | |||
| 2. | ASX:ALL | Aristocrat Leisure Limited | 40.87B | |||
| 3. | ASX:TLC | The Lottery Corporation Limited | 11.28B | |||
| 4. | ASX:JBH | JB Hi-Fi Limited | 9.58B | |||
| 5. | ASX:HVN | Harvey Norman Holdings Limited | 5.66B |
Same store growth i.e. growth on the basis of the equivalent square meterage over different periods.
Net debt to operating earnings (EBITDA) – if its more than three times, beware! This is a gauge of financial leverage.
Gross profit margin is important (gross profit margin to sales) because it shows how much a company is making just by selling a good but before other costs, such as labour.
Operating earnings (EBITDA) to sales – is also important.
Valuation multiples such as enterprise value (market cap + net debt) to operating earnings (EBITDA) or price earnings per share are very good.
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